Bitcoin without the internet; that’s actually true. Manchakura, a crypto service provider has launched a Bitcoin transaction service that allows users in Africa to transact Bitcoin using USSD and SMS.
Bitcoin on a Basic Feature Phone
Recently there surfaced a picture of a man using Bitcoin in what appeared to be a basic feature phone running on GSM technology. If this innovative idea is developed further, it could make bitcoin reach millions of people who cannot afford a smartphone.
Upon Investigation, we found that the person in question was using a USSD-based service that connected him to the Lightning network without any internet. As appeared on his mobile screen, the service was launched by Machankura, a Bitcoin service provider in Africa. The user was redeeming a prepaid Satoshi voucher.
Machankura is a slang term in Africa often used for money. The internet-free bitcoin service was developed by Kgothatso Ngako, an alumnus of the University of Pretoria in South Africa. He graduated in BSc Computer Science in 2015.
His idea behind the internet-free Bitcoin service was to make Bitcoin a currency of common usage. He further stated that he did not want to be broke, neither he wanted to do a job to be broke after retirement. He came across Bitcoin while searching for long-term investments.
With this motive, he works at Sigidli which launched the Manchakura Bitcoin Service. As of now, the internet-free Bitcoin service is available in:
- South Africa
How does it work?
Machankura brought two opposing technology namely the USSD service (Unstructured Data based on GSM) and the Bitcoin Lightning Network together.
The phone number itself acts as a lightning network address.
How to use Machankura:
- Users dial a number (USSD like: *134*382*382# in South Africa.
- They are introduced to a menu where they could choose to know more or use the system straight away.
- They register an account by creating a 5-digit pin. With this, they are ready to send and receive bitcoins on the Lightning Network.
Machankura users can get prepaid Sats cards from vendors and redeem those cards using Machankura in a simple way.
They have partnered with Bitrefill which is known for prepaid gift cards. Customers could convert their grocery store change and discounts into Bitcoin (Satoshi).
What is The Lightning Network?
The Bitcoin Network can only process 7 Transactions per second with a Block size of 1 MB as compared to Visa which can process 65,000 Transactions per second. Clearly, Bitcoin cannot compete to become a global financial network in its original form.
The Bitcoin community came forward to solve this issue of scalability with the Lightning Network.
Every day small transactions need not be on the Bitcoin blockchain. They will ultimately clog the system and make it slower for larger, more important transactions.
The Lightning Network is a scalability solution that only commits a series of transactions into the Bitcoin blockchain and not individual ones. These transactions are clubbed together and are signed by the sending and receiving parties.
To know more, watch this video.
Will Manchakura succeed?
It surely can.
There is a low smartphone penetration in Africa. With a huge population using basic feature phones. Connecting them to the Bitcoin network would be difficult.
But with Machankura, these people can not only benefit from connecting to a decentralized global platform such as Lightning Network but also have better control over their money.
Add this to the millions of people in India, China and Latin America, who do not have a smartphone. They too can take benefit from internet-free technology that helps them use cryptocurrencies.