An innovation leveraging the cellular network (GSM) could bring onboard millions of bitcoin (BTC) users previously unavailable through the internet-dependent bitcoin protocol. Developed by South African developer Kgothasso Ngako, the new SMS-based service is called Machankura, a South African slang word for money.
KG, as his friends call him, spoke to Cointelegraph from Pretoria, South Africa, about his fascination with bitcoin and hopes that bitcoin will bring BTC to millions of Africans via SMS.
Machankura, the #Bitcoin for feature phones service in Africa, is slowly growing. https://t.co/TZngXXVhu0
— Derek Ross ⚡5️⃣ (@derekmross) August 8, 2022
As an English speaker, when KG first learned about Bitcoin, he was religiously streaming audiobooks and podcasts on his way to work. When he fell down the bitcoin rabbit hole, his 20-minute commute to work turned into a 2-hour trek to the Council for Scientific and Industrial Research (CSIR) in South Africa, where he worked as a software developer.
In a separate interview, Master Guantai, founder of Bitcoin Mtaani, told Cointelegraph, “Africa has twice the number of mobile phones as people.” However, the penetration of internet-enabled smartphones remains low.
In Kenya, Guantai’s home country, he explains that topping up a phone with airtime is as common as credit card payments in the West. A report by Caribou backs up the claim: 94% of financial transactions in Africa go through USSD, the protocol used to send text messages, while only 6% of those transactions are done through mobile apps.
To sum up, while there are millions of phones in Africa, they are mainly used for texting. KG had stumbled upon something that could be of great importance for the adoption of Bitcoin in Africa.
“A lot of the talk in the room this year has been about USSD or making Bitcoin available on feature phones – this could be a part-time project – let me just set it up. And that’s basically how Machankura came about!”
KG started building an African language translation project Exonumia. He now offers bitcoin-related education in dozens of languages, and told Cointelegraph that if we make bitcoin more accessible to Africans, they will learn about money as a result and find a way to improve their quality of life.
As Exonumia picked up speed, he asked, “What are the other barriers to Bitcoin adoption? Language is one thing – internet access is another.” He summarizes the internet in Africa as a space dominated by large-scale applications such as Instagram and Facebook. The problems inherent in smartphone users are sufficient storage space on the phones, internet connection and price.
KG shares screenshots of Machankura in action.
KG encoded Manchakura while working at CRIS and explained, “The main focus is on spending and receiving Bitcoin.” KG explains how it works: users dial a number; They are then introduced to a menu where they can learn more about Bitcoin or register an account. “All you need to register an account is a 5-digit PIN, and from there you’re presented with a different menu: send and receive bitcoin.”
Here’s Paco, the bitcoin traveler who doesn’t stop teaching people around the world about bitcoin – at Cointelegraph’s request, he’s demonstrating Machankura to a teacher in Nigeria.
Used @Machankura8333 to share some sats with a high school teacher in Lagos, Nigeria. @LumiExc went to this school.#btc #hyperbitcoinization pic.twitter.com/ba5SPAGPLE
— Paco on ⚡ (@RunwithBitcoin) August 8, 2022
As a result, Lightning wallet-compatible apps on phones or computers can send Bitcoin to the phone’s number over the Lightning network — it’s effectively become a lightning address. Machankura has integrated Bitrefill, an increasingly popular prepaid Bitcoin gift card service in Africa. Also, starting today, South Africans can top up their lighting wallets with grocery store credit in a partnership with One for you, a voucher provider.
Machankura users can now redeem @Azteco_ (and 1 For You) bitcoin vouchers via the USSD interface. pic.twitter.com/qkPRwGzkrL
— Machankura 8333 (@Machankura8333) August 10, 2022
As Ngako summarizes, “A person who literally has no internet access can go from owning no bitcoin to owning bitcoin and then go to spending bitcoin.”
Related: Bitcoin Is for Billions: Fedimint on Scaling BTC in the Global South
Master Guantai also shares that it is already working well in six African countries. Also, popular exchange Paxful has already expressed interest, Guantai explains, understating the ease with which people can be onboarded via GSM.
KG points to potential concerns about the innovation as the government bans or reacts negatively to Bitcoin. The commission fees for buying the voucher might put people off, and the fact that KG understands the risk of not taking the time to learn the technology when offering a centralized company to hook people into bitcoin.
Also, the service is custodial, a point that goes against Bitcoin’s “not your keys, not your coins” ethos. So he’s looking for a way to use SIM cards as private keys.
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