The SMS service allows you to send BTC with a text

by · August 10, 2022

An innovation using the cellular network (GSM) can onboard millions of Bitcoin (BTC) users previously unreached by the Internet-dependent Bitcoin protocol. Built by South African developer Kgothatso Ngako, the new SMS-based service is called Machankura, a South African slang word for money.

KG, as he is known to his friends, spoke to Cointelegraph from Pretoria, South Africa, about his fascination with Bitcoin and his hope that sending it as a text will bring BTC to millions of Africans.

As an English speaker, when he first learned about Bitcoin, he listened to audiobooks and podcasts on his way to work. His commute was getting longer and longer to maximize Bitcoin education. A 20-minute cycle became a 2-hour commute to the Council for Scientific and Industrial Research (CSIR) in South Africa, where he worked as a software developer. KG also coded Manchakura while working at CRIS.

In a separate interview, Master Guantai, founder of Bitcoin Mtaani, told Cointelegraph, “The number of mobile phones in Africa is twice the number of people.” However, Internet-enabled smartphone penetration 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 supports the statement: 94% of financial transactions in Africa are through USSD, the protocol used to send text messages, while only 6% of these transactions are done via mobile apps. .

In sum, while there are millions of phones in Africa, they are mostly used for text messaging. KG had stumbled upon something that could be huge for Bitcoin adoption in Africa.

“This year a lot of conversations in the room were around 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 to be!”

KG started by building an African language translation project Exonumia. Now he offers Bitcoin-related education in dozens of languages, explaining to Cointelegraph that if we make Bitcoin more accessible to Africans, as a consequence, they will learn about money and find a way to improve their quality of life.

As Exonumia picked up steam, he asked: “what are the other barriers to accepting Bitcoin? Language is one – the other is internet access.” He summarizes the internet in Africa as a space dominated by large applications such as Instagram and Facebook.The problems inherent to smartphone users are having enough space on their phones, internet connection and price.

KG shares screenshots of Machankura in action.

KG explains, “The main focus is on using and receiving Bitcoin.” KG explains how it works. Users call a number and 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 get another menu: send and receive Bitcoin.”

Here’s Paco, the Bitcoin traveler who won’t stop teaching people about Bitcoin around the world – demonstrating Machankura to a teacher in Nigeria, at Cointelegraph’s request.

As a result, Lightning wallet-compatible apps on phones or computers can send Bitcoin over the Lightning Network to the phone’s number—it’s effectively become a Lightning address. Machankura has integrated with Bitrefill, an increasingly popular prepaid Bitcoin gift card service in Africa. Soon, South Africans will be able to top up their light wallets with credit from grocery stores in a partnership with “One for you”, a voucher provider.

As Ngako sums up, “A person with literally no internet access can go from having Bitcoin to having Bitcoin and then to using Bitcoin.”

Related: Bitcoin Is For Billions: Fedimint On Scaling BTC In The Global South

Master Guantai also shares that it is working well in six African countries already. In addition, the popular exchange Paxful has already shown interest, Guantai explains, as it is underestimated how easily people can get on board using GSM.

KG flags potential concerns with the innovation such as the government banning or reacting negatively to Bitcoin. The commission fees to buy the voucher can put people off, and the fact that KG understands that by offering a centralized company to onboard people into Bitcoin, there is a risk that they won’t take the time to get to know the technology.

Additionally, the service is custodial, a point that works against the Bitcoin ethos of “not your keys, not your coins.” So he’s looking for a way to use SIM cards as private keys.