Machankura: Bitcoin for Africa on an old-fashioned phone without internet

Machankura is a new service that allows residents of African countries to receive and send bitcoin on an old-fashioned mobile phone without internet.

Millions of people in Africa live without bank accounts, identity papers and often with a deficient payment infrastructure and currency. In some parts of the continent there is hardly a bank to be found and transfers to and from African countries are expensive and complex.

Bitcoin could be a godsend for many of the residents: cheaper, faster, simpler, independent of the local currency and you don’t need any identity papers – just a smartphone.

Although mobile telephones are now commonplace in Africa, including among the poorer segments of the population, smartphones are much less common and, moreover, not everyone has a subscription with an internet connection. And without the internet, no Bitcoin – right?

Machankura – Bitcoin without internet

Nope. Machankura now offers a solution for people in Africa who do not have internet or a modern smartphone: a bitcoin wallet that works via old-fashioned USSD menus.

Machankura ‘ is slang in South Africa and means something like ‘money’. It is a fairly new service, which is currently accessible to residents of Ghana, Kenya, Malawi, Nigeria, South Africa and Uganda.

The setup is quite simple. Machankura acts as a custodial service provider and users can reach a menu by calling a telephone number to manage their bitcoin wallet.

It is not necessary to create an account, because this is automatically generated on the basis of the telephone number used. All you have to do is call the number and choose a PIN to secure your account.

The menu is simple and offers options to receive, send, change account information and purchase goods/services. The latter offers options, for example, to spend the funds directly from the wallet on gift cards via Bitrefill or to pay the electricity bill.

Sending or receiving via Machankura is also simple. LN-URL gives users an easy-to-remember address, based on their phone number plus the addition of ‘ @8333.mobi ‘. For example: [email protected]. If desired, users can replace the phone number in the address with a username of their choice, for example ” [email protected] “.

Satoshis sent to the address will arrive in the wallet. An SMS informs the recipient. Sending works the other way around, you simply enter someone else’s address

From the Machankura wallet it is possible to send to other Machankura users or to Lightning addresses, but not (yet?) to normal on-chain bitcoin addresses.

What is special is that it is also possible to make a transaction to someone who does not yet have a bitcoin wallet or Machankura account. Users can simply make the payment to the recipient’s phone number plus the addition of ‘@8333.mobi’. After that, the recipient can directly access the Machankura wallet using the SMS menu via Machankura’s phone number.

Users also receive a static QR code, which can be used by others to make transactions to the wallet. Retailers can print this out and hang it in their store so that customers with a Lightning wallet can scan it to pay.

Machankura charges a fee of 40 satoshis per transaction for transactions through the wallet – less than one cent at the current exchange rate.

Threshold lowering

Machankura greatly lowers the threshold to receive or send bitcoin and the potential seems great. You don’t need internet, no modern smartphone, no technical knowledge and you don’t have to create your own wallet. With a service like Machankura, Bitcoin is within reach for many African residents.

Yet it is not a very revolutionary concept. Machankura is actually just a kind of M-Pesa, but what is innovative is that it is based on bitcoin. M-Pesa has been offering a comparable mobile payment platform for years and is extremely popular in large parts of Africa. That can work to Machankura’s advantage, because the target group is already familiar with a comparable service

Reverse

The downside is that the accessibility and ease of use come at the expense of many of the benefits that Bitcoin offers.

As mentioned, Machankura’s wallet is a custodial wallet, so Machankura takes on the actual management as an intermediary with all the associated risks: bankruptcies, hacks, government intervention or technical failure. However, developer Kgothatso Ngako indicated that he is investigating the possibility of SIM cards as private keys to allow self-custody.

The loss or theft of the phone remains a risk, but according to Ngako, Machankura is not intended as a long-term solution for savings. Better solutions can be found for this, such as a hardware wallet. Machankura is more focused on payments and making Bitcoin accessible.

Then there are the somewhat limited transaction options. Sending within the Machankura ecosystem is simple and to LN URL addresses as well, but on the other hand, the possibility to scan QR codes or to make on-chain payments is missing. Some parts of the Bitcoin ecosystem remain out of reach as a result. Users will also have to find a solution themselves for converting to a local currency.

Yet these are not insurmountable problems for resourceful Africans. At M-Pesa, for example, there is often an enterprising villager who acts as an exchange office.

startup

Machankura is a fairly new project, with only a few hundred users at the moment. The potential of the use case is great, but in the early start-up phase it remains to be seen whether Machankura will be able to persevere and not get bogged down in regulation.

Also read our other articles about Bitcoin and Africa!

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