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Bitcoin Projects Are Bringing Financial Inclusion To Feature Phones In Africabitcoinmagazine.com/culture/putting-bitcoin-on-african-feature-phones
485 sats \ 4 comments \ @k00b 2 Aug 2022 bitcoin
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1110 sats \ 0 replies \ @KenyaCoin 2 Aug 2022
You are expected to leverage Machankura as an amazing payment infrastructure rather than a long term self Custody product.
That this disclaimer needs to be written shows that this USSD-based solution is less than ideal.
With Machankura being a custodial wallet, there are risks that we know very well (back-end systems hack, rogue employee, shotgun KYC, rugpull, etc.). With Machankura using a third party USSD gateway (Africa's Talking), those risks extend to that third party (and to the telecom networks for each country as well). And finally, the mobile phone devices are not secure as well. Rarely are feature phones "locked" requiring a PIN, or otherwise secured so that anyone who grabs the phone cannot spend the bitcoin from the Machankura account for that number.
There's also regulatory risk. Some of the countries where Machankura is supported are hostile to bitcoin (e.g., Nigeria and Kenya). It would take only one "memo" sent to the telecom providers by their regulator and Machankura gets blocked in that country.
That being said, this low tech solution can be today used for receiving (and sending) remittances, P2P trading, for paying merchants, etc, without requiring KYC, and in a peer-to-peer manner.
Many will receive their first bitcoin on Machankura, and then progress to where they use a device where they self-custody bitcoin or use platforms with less risk than they are exposed to with Machankura. But for those with only a feature phone today, there is no alternative, so the benefits (of being able to receive some funds and then spend those funds) likely outweigh the risk (of potentially someday losing access to the account's balance).
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0 sats \ 0 replies \ @KenyaCoin 2 Aug 2022
You are expected to leverage Machankura as an amazing payment infrastructure rather than a long term self Custody product.
That this disclaimer needs to be written shows that this USSD-based solution is less than ideal.
With Machankura being a custodial wallet, there are risks that we know very well (hack, rogue employee, shotgun KYC, rugpull, etc.). With Machankura using a third party USSD gateway (Africa's Talking), those risks extend to that third party (and the telecom networks as well). And finally, the devices are not secure as well. Rarely are feature phones "locked" requiring a PIN, or otherwise secured so that anyone who grabs the phone cannot spend the bitcoin from the Machankura account for that number.
There's also regulatory risk. Some of the countries where Machankura is supported are hostile to bitcoin (e.g., Kenya). It would take only one "memo" sent to the telecom providers by their regulator and Machankura gets blocked in that country.
That being said, this low tech solution can be today used for receiving (and sending) remittances, P2P trading, for paying merchants, etc, without requiring KYC, in a peer-to-peer manner.
Many will receive their first bitcoin on Machankura, and then progress to where they use a device where they self-custody bitcoin or use platforms with less risk than they are exposed to with Machankura.
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0 sats \ 1 reply \ @KenyaCoin 2 Aug 2022
Users can think of Machankura as similar to Wallet of Satoshi, but in its skeletal form, without a cumbersome user interface. Instead of having a smartphone app, you’re interacting with the wallet via the USSD menu. Machankura manages the requests through its custom Application Package Interface (API) infrastructure with the Lightning Network. Users broadcast requests via mobile networks and not an internet connection, the request is then accepted and relayed through the internet and the Lightning Network via the Machankura database and existing Bitcoin and Lightning nodes.
At the time of this writing, Machankura seems to work well and its website indicates it has coverage in at least six Africa countries — Ghana, Kenya, Malawi, Nigeria, South Africa and Uganda — with the USSD codes and step-by-step instructions for use included as well.
Assuming your phone or sim card is stolen, that implies your funds have been stolen as well, or if someone sim swaps your number, they could gain access to your funds. You are expected to leverage Machankura as an amazing payment infrastructure rather than a long term self Custody product with the hope of anticipating different improvements and updates as it keeps unfolding.
BitText appears to be an open-source version of Machankura, throwing its two hands into the air with anticipation of global contributions that could fix and improve this Bitcoin-on-USSD solution by better targeting self custody, security and privacy, as well as transactions interoperability with Bitcoin’s Layer 2 Lightning Network.
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0 sats \ 0 replies \ @KenyaCoin 2 Aug 2022
Also see this related post, here on SN:
Machankura users across Africa can now buy airtime using Bitcoin over USSD #53461
https://nitter.it/Machankura8333/status/1554420971330838528
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