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SMS service allows to send BTC with a text

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An innovation using the cellular network (GSM) could integrate millions of Bitcoin (BTC) users previously inaccessible 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 his friends call him, spoke to Cointelegraph from Pretoria, South Africa about his fascination with Bitcoin and the hope that Bitcoin via SMS will bring BTC to millions of Africans.

An English speaker, when KG first heard of Bitcoin, he religiously streamed audiobooks and podcasts on his way to work. As he fell down the Bitcoin rabbit hole, his 20-minute commute became a two-hour walk 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, “The number of cellphones in Africa is double the number of people.” However, the penetration of Internet-connected 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 Caribou report confirms this claim: 94% of financial transactions in Africa are done via USSD, the protocol used to send SMS, while only 6% of these transactions are done via mobile applications.​​

In sum, although there are millions of phones in Africa, they are mainly used to send SMS. KG had stumbled upon something that could be huge for Bitcoin adoption in Africa.

“There have been a lot of conversations in the space this year about USSD or the possibility of making Bitcoin accessible on feature phones – this could be a part-time project – just let me set it up. And that’s how Machankura was born!”

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

Once Exonumia gained momentum, he asked, “What are the other barriers to Bitcoin acceptance? 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 inherent issues for smartphone users are having enough space on phones, internet connectivity and price.

KG shares screenshots of Machankura in action.

KG coded Manchakura to address these issues, explaining, “The focus is on spending and receiving Bitcoin.” KG explains how it works: users dial a number and are then presented with a menu where they can learn more about Bitcoin or create an account. “All you need to create an account is a 5-digit PIN, and from there you are presented with a different menu: send and receive bitcoins.”

Here’s Paco, the bitcoin traveler who can’t stop teaching people about bitcoin all over the world, demonstrating Machankura to a teacher in Nigeria, as requested by Cointelegraph.

As a result, apps compatible with Lightning wallets on phones or computers can send bitcoins through the Lightning network to the phone number. It is actually a Lightning address. Machankura has integrated with Bitrefill, an increasingly popular prepaid gift card service for Bitcoin in Africa. Additionally, from Wednesday, South Africans will be able to top up their lighting wallets with credit from grocery stores as part of a partnership with “One for you”, a voucher provider.

As Ngako sums it up, “A person with literally no internet access can go from having no bitcoin to having bitcoin and then moving on to spending bitcoin.”

Related: Bitcoin is for Billions: Fedimint on Scaling BTC in the Global South

Master Guantai also shares the fact that it is already working well in six African countries. Additionally, popular exchange Paxful has already shown interest, Guantai says, because the ease with which people can be onboarded using GSM is underestimated.

KG flags potential innovation concerns as government bans or reacts negatively to bitcoin. The commission charge for buying the voucher might put people off, and the fact that KG understands that by offering a centralized business to onboard people into Bitcoin, there’s a risk that they won’t spend the time getting familiar with technology.

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