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Dadaab refugee complex, in Kenya, on April 16, 2018. Kenya is one of the African nations where bitcoin users are now using mobile phones to transact over the Lightning Network, even without internet. (Photo by YASUYOSHI CHIBA/AFP via Getty Images)AFP via Getty Images

Theres a growing population of Africans without reliable internet access that are 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, for accessing bitcoin despite the continents mobile internet connectivity challenge. It offers a way to access the Lightning Network through an Unstructured Supplementary Service Data interface, utilizing mobile phones Subscriber Identity Module telecommunication network. USSD is similar to Interactive Voice Response.

You usually listen to an IVR program when you call a mobile network operators customer service. It tells you which numbers to press for the service you want to access. USSD is kind of like IVR but in textual form. Machankura is already being used by roughly 2,900 African users across more than seven countries, including Nigeria, Kenya, Ghana, Uganda and Namibia, Ngako told me. Despite the rapidly growing tech industry on the continent, internet penetration across Africa still has a long way to go.

The silver lining here is that the situation presents a unique opportunity for Africans to build tools for rural and developing areas that havent been explored elsewhere. Other offline bitcoin solutions, such as Locha Mesh in Venezuela, rely on mesh networks to bounce the message from device to device until it reaches a device with internet connectivity. That only works if other people within a few miles of the sender are also operating a mesh network device. In contrast, the unique context in Africa offers a business advantage for technologists looking to reach the 2.9 billion people that the International Telecommunications Union estimates still lack reliable internet access.

The USSD protocol, a communications layer for mobile telecommunication networks that is often compared to SMS, gives software developers a lot of under-hyped flexibility. The USSD protocol allows forwarding request to online applications that bitcoin users can tap into by dialing a code like *483*8333# in Kenya, for example, to interact with the Machankura app even if the phone doesnt have internet connectivity. 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 barter BTC, which involves selling your BTC for goods and services on Bitrefill.

Machankura itself offers a Lightning-friendly bitcoin wallet, so users can send to a wallet associated with a user name or phone number or choose to send to any other Lightning wallet using a Lightning address. If all goes well, the user receives a screen message detailing that the payment was successful and showing the Lightning address that received the funds.

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

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 only consumers of emerging technology. We are also producers and inventors. Although there is a growing number of internet startups on the continent, internet penetration of the continent still remains very low. In 2020, the World Bank estimated that only 29% of the population of Sub-Saharan Africa routinely used the internet. This inspires technologists to build for customers who dont have internet connectivity.

On the other hand, phone usage is widespread. GSMA (Groupe Speciale Mobile Association) data from 2018 indicated that 74% of sub-Saharan Africans used SIM cards, estimating that number will rise to 84% by 2025. In short, a significant number of the people in Africa are using phones without internet connectivity, like the Motorolla C113 or feature phones like the Nokia 3310.

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

Secondly, the Machankura USSD service is currently custodial. Users dont own their keys, which means they could potentially lose their funds. When it comes to bitcoin the rule is not your keys, not your coins.

One option might be for apps to use a SIM card like a Lighting signer that allows users to backup their wallets. The issue here is that current phone SIM cards are not easily programmable. To solve the programmability issue, the team behind Machankura is currently experimenting with programming SIM overlays as Lightning signers. In addition, every USSD request to the Machankura application, is forwarded to Machankuras servers by a third party (a mobile network operator or a USSD gateway service like Africas 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 issue, the Machankura team told me they are thinking about potentially hosting the service as a mobile virtual network operator. And, last but not the least, using an app hosted on specific mobile network operators means that the service is limited to certain countries where the mobile operators network is available. Therefore, scaling the service means integrating with mobile network operators in every new country or using a gateway like Africas Talking to ease the process.

Theres still a long way to go until offline bitcoin solutions are borderless like the bitcoin network itself. Personally, I would love to see simple phone apps offering more easy onboarding that allows people to buy bitcoin, not just send or receive bitcoin someone already owns, directly from the services USSD screen. These could leverage mobile money services that are already accessible via USSD. And, of course, I hope that future iterations make such services non-custodial. All things considered, I believe we will continue to see more innovations using bitcoin that are unique to the global south in the coming years. African bitcoiners are only getting started.

Im a Cameroonian software developer and Melton Foundation fellow focused on open source contributions to the Bitcoin Dev Kit, funded by Btrust. I graduated from Ashesi University College with a degree in computer science and am also a former contributor to Auth0, a web identity provider which helps developers easily integrate authentication and authorization in their apps. Im now based in Kenya, where Im the co-host of the Nairobi BitDevs technical meetup.

Read more here:

How Africans Are Using Bitcoin Without Internet Access - Forbes