Over the last month, with most of the global bitcoin news cycle bandwidth flooded with ETF news, Bitcoin developers continue doubling down their focus on bringing freedom money to billions. Last week, Bitcoin builders, entrepreneurs, and ecosystem stakeholders gathered in South Africa for the inaugural Adopting Bitcoin Cape Town conference.
At the conference, the Bitcoin developer behind Machankura, Kgothatso, announced a Bitcoin Java Card project to enable feature phones to become bitcoin self-custodial devices—effectively bitcoin hardware wallets.
In the middle of 2022, Bitcoin developer Kgothatso introduced the world to using Bitcoin’s lightning network over Unstructured Supplementary Service Data (USSD) through a project called Machankura, which continues to pioneer in this space.
The project operates in eight African countries and allows individuals with phones without internet connectivity to transact bitcoin over the lightning network using USSD short codes—a text-based communication protocol similar to SMS over GSM-enabled phones.
While Machankura gives its users offline access to a cheap instant global payment network, its custodial nature introduces fragility. Two problems arise:
(1) regulatory interventions could lead to a shutdown or increased costs, passed on to customers, and
(2) KYC requirements may revert us to the status quo of banking hurdles, losing Bitcoin’s practical and freedom-oriented benefits.
One way to solve this problem is to focus on the Subscriber Identity Module (SIM) card, which all phones, smart or feature, have in some form. In doing this, the goal is to provide an out-of-the-box bitcoin wallet that can send, receive, and manage coins.
To build this, he is leveraging Java Card, a software that securely allows applets to run on Smart Cards. The correlation is that SIM cards installed in mobile devices are a type of Smart Card, and Java Card operates a programming interface to communicate with the SIM card.
There have been attempts at achieving a similar feat, including by Ledger in 2015 and more contemporary work by Spectre Wallet and Satochip. However, the key differentiator here with this project is its focus on SIM cards to allow compatibility with regular phones.
Additionally, this project will focus on feature phones—and, by extension, all others—and avoid creating a mobile app and instead provide a SIM toolkit interface that will facilitate user interaction with the SIM card in precisely the same way users interact with their MTN SIM cards to query balances, for example.
The last piece is making the project open-sourced, as this route eliminated the closed-source and patent control issues associated with past systems like Schnorr signatures—a point that lead developer Kgothatso highlighted. He added that this is also necessary to ensure that not only all problems highlighted previously are avoided but also to allow anyone to contribute freely and develop this universal good.
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Banking The Unbanked With Bitcoin
Though early, the project is a testament to the ingenuity and innovation present in Africa’s bitcoin development community. It will have consequences beyond its shores and, if successful, could see millions leapfrog existing inefficient banking rails into the payment network of the future—bitcoin.
Further, with over 80% of Africans owning a cellular phone, according International Telecommunication Union (ITU), this project could bring bitcoin to these millions. As an open-source project, we expect the same for individuals outside Africa, making the potential applicable to billions worldwide, who will have access to a global monetary network and regain their financial freedom.
Suffice it to say that it is not that the unbanked need more education but more tools, as they are often the savviest with money.
Bitcoin will provide these individuals with a banking experience that puts them not just on the same but on a higher level as their banked Western counterparts and achieve the long-touted promise of banking the unbanked.