How Africans Use Bitcoin Without Internet Access

It is a growing population of Africans without reliable internet access still using bitcoin for peer-to-peer transactions thanks to a solution called Machankura .

In 2022, South African software developer Kgothatso Ngako built a tool, Machankura, to access bitcoin despite the continent’s mobile internet connectivity challenge. It offers a way to access Lightning network through one Unstructured Additional Service Data interface, which uses the mobile phone’s Subscriber Identity Module telecommunications network. USSD is similar to Interactive Voice Response.

You usually listen to an IVR program when you call a mobile operator’s customer service. It tells you which numbers to dial for the service you want to access. USSD is a bit like IVR, but in text form. Machankura is already being used by about 2,900 African users in more than seven countries, including Nigeria, Kenya, Ghana, Uganda and Namibia, Ngako said. Despite the rapidly growing technology industry on the continent, internet penetration across Africa still has a long way to go.

The advantage here is that the situation provides a unique opportunity for Africans to build tools for rural and developing areas that have not been explored elsewhere. Other offline bitcoin solutions, such as Locha Mesh in Venezuela, trust mesh network to bounce the message from device to device until it reaches a device with an Internet connection. It only works if other people within a few miles of the sender are also operating a mesh network device. In contrast, the unique context of Africa provides a business advantage for technologists seeking to reach the 2.9 billion people who International Telecommunications Union estimates still lack reliable internet access.

How to use USSD with Bitcoin

BTC works

The USSD protocol, a communication layer for mobile telecommunications networks often compared to SMS, gives software developers a lot of underhyped flexibility. The USSD protocol allows request forwarding to online applications that bitcoin users can use by dialing a code like *483*8333# in Kenya, for example to interact with the Machankura app even if the phone does not have an internet connection. Here is a demo of a payment on Machankura:

Actions on Machankura can even be more complex than a simple send, receive or “check balance”. You can “trade BTC”, which involves selling your BTC for goods and services on Bitrefill.

Machankura even offers a Lightning-friendly bitcoin wallet, so users can send to a wallet associated with a username or phone number or choose to send to another Lightning wallet using a Lightning address. If all goes well, the user receives a screen message showing that the payment was successful and showing the Lightning address that received the money.

Despite the early stage of the Machankura project, the growing popularity of this product shows that the bitcoin economy can include low-income populations without reliable internet access. Femi Longe, program director at the education initiative Qala Africa told me that “Africans need to think about bitcoin in its context and how it can be used to solve the problems they face”. Projects like Machankura illustrate how bitcoin can be used in such an African-centric context.

Africa’s rising technology sector

If the Global South is going to lead bitcoin adoption, as so many industry experts claim, then I also believe that African users and developers will lead innovation at the bitcoin application level.

Africans are not just consumers of new technology. We are also manufacturers and inventors. Although there is an increasing number of internet startups on the continent, internet penetration on the continent is still very low. In 2020, the World Bank estimated that only 29% of the population in sub-Saharan Africa routinely used the internet. This inspires technologists to build for customers who do not have an internet connection.

On the other hand, telephone use is widespread. Data from the GSMA (Groupe Speciale Mobile Association) from 2018 indicated that 74% of sub-Saharan Africans used SIM cards, and projected that number to rise to 84% by 2025. In short, a significant number of the population in Africa use phones without internet connection, such as the Motorola C113 or feature phones such as the Nokia 3310.

To make Lightning payments over USSD reliable, secure and censorship-resistant, Machankura has to overcome several challenges. These challenges include the fact that USSD does not use encrypted messages, so these communications can easily be intercepted by a third party and are not ideal for situations that require privacy. According to Kgothatso, they are already working on ways to introduce encryption on the service to mitigate this challenge.

Secondly, the Machankura USSD service is currently in custody. Users do not own their keys, which means they could potentially lose their money. When it comes to bitcoin, the rule is “not your keys, not your coins.”

An alternative could be for apps to use a SIM card as a Lighting signer that allows users to back up their wallet. The problem here is that current phone SIM cards are not easily programmable. To address the programmability issue, the team behind Machankura is currently experimenting with programming SIM overlays as Lightning signers. In addition, each USSD request to the Machankura application is forwarded to Machankura’s servers by a third party (a mobile network operator or a USSD gateway service such as Africa’s Talking). These are all centralized platforms that could potentially be forced by the government to take down Machankura or to cancel the service.

To solve this problem, the Machankura team told me that they are thinking of hosting the service as a mobile virtual network operator. And last but not least, using an app hosted by specific mobile network operators means that the service is limited to certain countries where the mobile operator’s network is available. Therefore, scaling the service means integrating with mobile network operators in each new country or using a gateway like Africa’s Talking to facilitate the process.

There is still a long way to go before offline bitcoin solutions are borderless like the bitcoin network itself. Personally, I would love to see simple phone apps that offer more easy onboarding that allows people to buy bitcoin, not just send or receive bitcoin someone already owns, directly from the service’s USSD screen. These can utilize mobile money services that are already available via USSD. And of course I hope future iterations make such services non-custodial. All things considered, I think we will continue to see more innovations using bitcoin that are unique to the Global South in the coming years. African Bitcoiners are just getting started.

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