How I Brought the Machankura Bitcoin App to Africa

One of the highlights of Bitcoin since Satoshi Nakamoto published the white paper was: “You don’t need a bank. All you need is a smartphone.”

But what if you don’t have a smartphone?

This is the case for millions of people in Africa; That’s why former Amazon software developer Kgothatso Ngako created the no-frills app called Machankura.

Kgothatso Ngako is a featured speaker at this year’s Consensus festival, held May 29-31 in Austin, Texas.

Or maybe “app” is misleading because it’s designed to work on basic phones that don’t have a touchscreen, camera, or features of the iPhone. All you need is the ability to write text. Using the Lightning Network, Machankura (slang for “money”) allows users to send and receive bitcoins with or without the internet.

This is something most of us take for granted. Consider a bitcoin wallet address: Usually “37LaxH5ihB5hZMXs72fofA8qzanipuWTF!” It is an address that looks like. Typing manually will ruin your week. If you make a typo and you will make another typo, your Bitcoin is lost forever.

Fortunately, we can copy and paste this beast using our laptop or smartphone. What about without a smartphone? “The user may not have a copy-and-paste function,” Ngako says. “But Bitcoin has these cool things called lightning addresses, which are like email.” Now Machankura users can redeem Bitcoin by simply typing normal-looking numbers and email addresses.

Before heading to Austin for Consensus, Ngako shares how Facebook did something clever that inspired Machankura, how its 15,000 users are spending bitcoin, and why usage patterns in Africa are, in some ways, surprisingly similar to patterns in the United States.

The interview has been condensed and lightly edited for clarity.

Before creating Machankura, you helped spread Bitcoin in Africa. How exactly?

Kgothatso Ngako: I grew up in a town called Mamelodi. So the main hurdle at the time was that most of the literature explaining Bitcoin was in English, right? But we have all these different African languages. So if someone is interested in Bitcoin and can’t speak English, how can they get the content to learn about it? So we started an organization called Exonumia. Its aim is to translate Bitcoin literature into African languages.

What Bitcoin literature did you use? White paper I guess?

Yes, white paper. A few simple things. The email Satoshi sent when Bitcoin version 0.1 was released and Hal Finney’s response to it. And of course the “I’m Hodling” sign.

Classical.

And a few more books like Understanding the Lightning Network and The History of Bitcoin and The Government of Kenya. We are also translating a few books such as “The Blocksize War” and “21 lessons”.

The story continues

And finally you launched Machankura. What was the purpose?

That’s why I try to explain Bitcoin to as many people as I can through the articles I translate, but I encounter all these problems. A person may not have a smartphone. If they have a smartphone, it doesn’t have data packages on it. If they are interested or you give them a Wi-Fi hotspot, there is not enough space on their phone.

All these problems are solved by getting a service that a person does not have to install on his phone and does not have to pay to use it. So USSD [Unstructured Supplementary Service Data] That’s pretty much it. It is like a reverse invoicing website. Look at what Facebook is doing in developing countries, I think Twitter is doing it too. Facebook can be used for free, right? People using a mobile cellular connection can access Facebook without paying for access, as Facebook will then foot the bill with the telecom company. Therefore, most USSD interfaces operate on a similar principle.

So what exactly does this look like when looking at the user’s experience? Especially if they don’t use a smartphone?

The user may not have copy-paste functionality. But Bitcoin has these cool things called lightning addresses, which are addresses that look like email but can be read by humans. So mine is [email protected]. I can share this with just about anyone. Alternatively, if someone knows my number 0739 383 807 they can use it as my lighting address.

Is this your phone number?

Yes. So whether or not you have the copy-paste function, if you have Bitcoin you can type either. You can then send me Bitcoin.

Unbelievable. How many users do you have and where are they?

So now we have reached almost 15,000 users. We are in several countries: South Africa, Nigeria, Kenya, Ghana, Malawi, etc.

What are some things people do with it?

In South Africa we have a concept called Stockpile. It has other names in other places. In Kenya they call it “chama”. Effectively, this is desktop accounting.

A group of people get together at someone’s house and you put money on the table. And if we all contribute an equal amount each month, we will distribute it at the end of the year or buy food or other things in bulk.

Interesting. So is this a way to encourage people to save money through positive peer pressure and accountability?

Yes. There may also be an affordable “starter pack” to help people in the group buy in bulk. This will meet the minimum purchase order that one person alone cannot do but the group can.

Instead of getting merchants to accept Bitcoin (which can be difficult) they mostly use bitcoin to buy gift cards, am I right? So where do they spend it?

Yes. The biggest criminals [internet] air time, electricity and food. If you have a gift card for a grocery store in South Africa, there’s a lot you can do with your bitcoin. You can pay your bills because some grocery stores allow you to pay your bills at the cash register, you can book a bus ride, or even pay for a flight ticket at the grocery store.

As far as you can tell, how many users use Bitcoin as their primary way to pay their bills and make a living?

That’s not a lot of users. That’s a very small number of users overall. And a lot of people still work regular jobs that don’t pay Bitcoin, right? So maybe it’s 10% or 20% of the total users.

So what is the main thing people use it for?

Discovery, I guess. That’s the important thing. Many people say, “Okay. I’ve heard of this Bitcoin thing. So how do I use this?” A lot of people create an account, then look around and you’re like, “Oh, okay. This person hasn’t come back.” Then the all-time high occurs, and then that person comes back again.

Honestly this is very similar to how people in the US use bitcoin

Exactly.

Thanks Kgothatso, good luck with the project and see you at Consensus.