Crypto without internet: SMS service allows Bitcoin transactions via text in Africa

Machankura, the South African SMS-based service named after the local slang word “money,” is bridging the gap between Bitcoin and people without internet access. Kgothatso Ngako, the developer of the service, believes that due to this new technology, people in Africa will be able to receive and spend Bitcoin without the need for an internet connection.

Ngako describes that with Machankura, users may dial any given number. The user is then prompted with an option to either learn more about Bitcoin or register an account where they need to create a five-digit pin. After all of this is done, the user is now able to send and receive Bitcoin.

As Ngako explained, the main reason for creating Machankura was that 94% of financial transactions in Africa happen in USSD, the protocol used to send text messages, while the remaining 6% is made via mobile apps.

In addition, since he believes internet access is one of the biggest hurdles for populations in Africa, the decision to create an SMS-based solution for accepting and using Bitcoin was easy.

“This year, a lot of conversations in the space were around USSD or making Bitcoin accessible 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,” Ngako explained.

Also, Bitcoin educator Paco de La showed on his Twitter how Machankura works.

Due to this innovation, wallets compatible with Lightning Network are now able to send Bitcoin via Lightning to phone numbers. The solution provided by Machankura has already gained interest from many companies, including Bitrefill, Azteco, and Paxful. These platforms bring Bitcoin adoption to Africa through different means. The companies are also working on ways to collaborate with one another.

On the other hand, this current solution also has its drawbacks. Ngako stresses that now the service is custodial, which works against the Bitcoin ethos of “not your keys, not your coins.” He wants to change it and looks for ways to use SIM cards as private keys. Also, he warned that regulators might take action against the innovation.