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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

What happened

Cryptocurrencies are having a banner week, despite chaos in the broader market, especially in the banking sector, which is likely due to the fact that many see cryptocurrencies as an alternative to the traditional banking system.

Over the last week, the price of the world's largest cryptocurrency, Bitcoin (BTC 0.28%), traded roughly 25% higher as of 1:35 p.m. ET Thursday, according to data from S&P Global Market Intelligence.

Meanwhile, the price of the world's second-largest cryptocurrency, Ethereum (ETH -0.57%), traded roughly 17% higher, and the price of Bitcoin Cash (BCH -0.24%) was up more than 14%.

Bitcoin was really invented in the wake of the Great Recession. People didn't trust the mainstream financial system or the government for that matter, which led to the creation of decentralized blockchain technology and the cryptocurrencies that trade on these networks.

Image source: Getty Images.

Three banks -- Silvergate Capital,SVB Financial's Silicon Valley Bank, andSignature Bank -- collapsed over the last week. Also, Swiss bank Credit Suissecame under intense selling pressure this week and had to borrow 50 billion Swiss Francs from Switzerland's central bank to shore up liquidity.

I think this week reminded people of why Bitcoin got started in the first place. However, Silvergate and Signature ran real-time payment platforms used mainly by crypto exchanges and other crypto clients. Meanwhile, SVB had banked many crypto start-ups.

I am surprised cryptocurrencies have fared so well given everything that has happened. For one, the collapse of Silvergate and the closure of Signature shutters two of the main fiat on-and-off rails that crypto firms were using to swap dollars for cryptocurrencies and vice versa, which raises liquidity concerns. Additionally, media reports suggest that any potential buyer of Signature must agree to forgo the bank's crypto business.

This also suggests that banking regulators are looking to drive crypto away from the traditional banking system. Former Sen. Barney Frank, who authored critical banking regulation following the Great Recession known as Dodd-Frank and also sat on Signature's board of directors, has now repeatedly said he thinks the closure of Signature was related to "a very strong anti-crypto message."

Bitcoin also seems to be holding up despite the fact that the European Central Bank raised interest rates by a half-point this morning. Rising rates crushed cryptocurrencies all throughout 2022 and the Federal Reserve will convene next week to discuss whether or not the agency should keep raising interest rates in the U.S.

Bitcoin and crypto price action are very, very tough to predict, so while I'm surprised to see crypto investors shaking off all of the bad news this week, never say never in this sector. Additionally, I do think all of the banking issues are helping to drive Bitcoin higher.

For now, I'd keep an eye on how the Fed moves next week. A rate hike will likely not be so favorable for crypto while no rate hike could be very positive. Ultimately, I continue to like Bitcoin and Ethereum and think they will be here for the long haul.

SVB Financial provides credit and banking services to The Motley Fool. Bram Berkowitz has positions in Bitcoin, Bitcoin Cash, and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and SVB Financial. The Motley Fool has a disclosure policy.

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Why Bitcoin, Ethereum, and Bitcoin Cash Are Surging This Week - The Motley Fool

Bitcoin and other cryptocurrencies were little changed Thursday, having consolidated gains from one of the best stretches for digital assets in more than two years amid hopes of more accommodative monetary policy from the Federal Reserve.

The price of Bitcoin has risen less than 1% over the past 24 hours to above $24,800. Bitcoin is still up almost 50% so far this yearhaving soared from a bearish dip after falling below $20,000 last weekbut it has fallen back from a peak above $26,000 on Tuesday, which marked the highest levels since the crypto crash accelerated last June.

We still see a tug-of-war near $25,000, said Alex Kuptsikevich, an analyst at broker FxPro. Prices are returning under the 200-week average, failing to go immediately higher. Technically, an important signal of a return to a long-term bullish trend would be a consolidation above $25,000 at the end of the week. Nevertheless, keeping the price above $20,000 and the 200-day average looks like a sufficient condition that Bitcoin is not ready to decline sharply further and remains interesting for buying on declines.

Crypto prices have jumped higher amid a crisis of confidence across the U.S. banking sector. While the failures of Silvergate Capital, Silicon Valley Bank, and Signature Bank since last week have important implications for the digital asset industry and functioning of crypto markets, traders have turned bullish for a different reason.

The meltdown of Silicon Valley Bank in particularthe biggest banking collapse since the 2008-2009 financial crisishas spurred bets that the Fed will not raise interest rates in the coming months as much as once expected. Higher rates have hammered Bitcoin prices over the past year as the Fed has tried to get decades-high inflation under control with tighter financial conditions. But recent stresses on banks, an unintended consequence of the rate environment, has fueled speculation of a more careful Fed.

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A cap on rates, and even the prospect of rate cuts this year, would be a major tailwind for Bitcoin, because higher rates dampen demand for riskier bets like cryptos. While the Dow Jones Industrial Average and S&P 500 have slid amid banking woeswith Bitcoin bucking its correlation to the stock marketthe tech stock-heavy Nasdaq, which is similarly sensitive to rate expectation, has been more resilient.

Nevertheless, markets broadly sold off Wednesday amid fears that the U.S. banking panic could go global, with shares in Swiss bank Credit Suisse (ticker: CS) selling off dramatically. Bitcoin wasnt able to escape the short-term selling pressure, hence the move lower through Wednesday and into Thursday.

Bitcoin weakened as chaos across Wall Street saw another banking crisis trigger another wave of panic-selling of risky assets. Credit Suisse is a bigger story than SVB and this has Wall Street extremely nervous, said Edward Moya, an analyst at broker Oanda. Banking turmoil could ultimately prove to be rather bullish for Bitcoin, but for now crypto weakness is justified.

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In focus ahead of the next Fed decision on rates due next week, after the central banks policy-setting committee meets March 21-22, are any signs of more stress in the banking system as well as economic data that add color to the inflation picture.

Beyond Bitcoin, Ether the second-largest cryptolost 1% to above $1,650. Smaller cryptos, or altcoins, were weaker, with Cardano and Polygon losing 3%. Memecoins were also in the red, with Dogecoin down 3% and Shiba Inu shedding 5%.

Write to Jack Denton at jack.denton@barrons.com

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Best of Bitcoins Latest Rally Is Over. Watch This Key Level for the Next Move. - Barron's

In episode 11 of Hashing It Out, Cointelegraphs Elisha Owusu Akyaw speaks to Steven McClurg, the chief investment officer of Valkyrie Investments, about the state of Bitcoin (BTC) exchange-traded funds (ETFs) and the way forward.

Regulators in the United States have mounted stiff opposition against listing Bitcoin spot ETFs even though Canadian and European regulators have given the green light. McClurg points out that even for the Canadian and European markets, these approvals also took a long time. According to McClurg, the two biggest issues U.S. regulators have with Bitcoin spot ETFs are custody and market manipulation.

The chief investment officer believes that the custody issue would have largely been dealt with if not for the FTX fiasco, which caused regulators to take a step back to scrutinize whether custodians are safe before approving more Bitcoin investment products. On the second issue of market manipulation, McClurg believes that similar products in Canada have made a case for why such concerns are invalid.

Locally, companies like Valkyrie Investments are actively working with regulators to answer major questions surrounding the safety of Bitcoin Spot ETFs. McClurg says Valkyrie has been educating regulators on how custody works and sharing notes on due diligence done by the company on various custodians, which picked up red flags in some of the companies that went bust last year.

According to McClurg, despite the lack of United States-based Bitcoin spot ETFs, people in the country can have exposure to spot ETFs from Canada through brokerages.

Related: Bitcoins 2023 price action driven by the desire to regain losses, according to professional trader

He also points out that some lawmakers, especially in the House of Representatives, have been receptive to making laws that make it easier to launch Bitcoin spot ETFs. Nevertheless, McClurg maintains a pessimistic outlook on how soon consumers can access spot ETFs from the United States.

Other topics discussed include:

Listen to the full discussion about Bitcoin ETFs on Spotify, Apple Podcasts, Google Podcastsor TuneIn. You can also check out Cointelegraphs complete catalog of informative podcasts on the Cointelegraph Podcasts page.

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FTX fiasco set back the approval of Bitcoin spot ETFs: Valkyrie investment chief - Cointelegraph

Three banks have failed in less than a week. U.S. government officials have stepped up to backstop losses, in a bid to prevent further panic. There are genuine concerns about whether that was the right move effectively bailing out two poorly run institutions facing highly irregular problems and letting the third collapse as well as the risk that more banks will fail.

So should you take your money out of your bank and keep it safe under the mattress or in bitcoin? The answer is, if youre anything like me, whatever money you have in a checking account is insured by the Federal Deposit Insurance Corp. (FDIC) up to $250,000. So, no, its improbable that JPMorgan Chase will rug you.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.

Still, many are moving their money into crypto, like Tatiana Koffman, who described the move Monday in CoinDesk as an act of protest. Putting aside stablecoins, crypto is volatile, making these assets less than ideal currencies if you want to preserve your wealth. But they offer root ownership meaning no one can make a run for your deposits.

Bitcoin, as many have already said, was born out of an earlier banking crisis. The blockchains very first block contained a message about bailouts. It was designed to disintermediate third parties from internet money by making people responsible for their own keys, in contrast to the highly intertwined private banking sector and public sector.

President Joe Biden has said U.S. taxpayers will not foot the bill for the bailout, and that unlike in 2008 the architects of this financial crash will not benefit. There are enough responsible actors here to play the blame game, but if youre like Tatiana the issue is The System itself.

SVB essentially took a bet that interest rates would stay near zero forever. Over the past couple of years, it took in deposits from a tech industry that was booming, in part, due to historically low rates that made venture capital financing worth the risk for many investors. In an effort to juice as much yield as possible from those deposits, SVB put a majority of its money into long-term, fixed-rate interest investments.

The Federal Reserve, as my colleague David Z. Morris wrote, essentially created the foundation for a tech hype cycle through financial engineering to stimulate the economy, and then threw the frying pan into ice water when things got too hot. The recent interest rate rises were not necessarily unpredictable, but the Feds inconsistent messaging saying rate hikes were unthinkable until they werent did not help the situation.

Venture capitalists like Peter Thiel helped accelerate SVBs outsized growth, and its quickened collapse. Thiel is reportedly a believer in Girardian mimicry, which explains why groups of humans make predictable if irrational decisions and our relentless pursuit of scapegoats. Tech leaders have said SVB grew out of a feedback loop that made it the place for startups to bank.

Also, a similar social dynamic, fueled by chat groups and social media, kicked in on the way down. Some even put sometimes-CoinDesk author Byrne Hobart at the center of things, because he wrote a supposedly well-read blog last month saying SVB was effectively insolvent. And so depositors like Roku, which left some $487 million uninsured at SVB, are not blameless.

Politicians, who like Florida Gov. Ron DeSantis are using the situation to justify their pet causes, once promised us no more bailouts, yet wrote the rules that allowed SVB to use a little accounting magic and hide billions in unrealized losses. Some, like former Rep. Barney Frank said Signature Bank, where he is now a board member, was attacked for political reasons because it dealt with crypto.

When Frank was in Congress he co-sponsored the legislation ultimately enacted as the 2010 Dodd-Frank Act, stymied bank failures. Signature had reportedly experienced the worst of its bank run and could have survived without government intervention, Frank said. If moral hazard is the argument that people will engage in riskier behavior if protected from the consequences of their actions, then we need a new term for Franks claims.

There were sound arguments for stepping in and preventing a cataclysmic blow to the valuable U.S. tech industry. Taxpayer money isnt being used (at least not directly), deposits for growing businesses are safe, shareholders and bondholders arent being bailed out and even the New York Times is calling for clawbacks of SVB executives compensation and stock sales.

And, yes, there are solid arguments in favor of having let Silicon Valley Bank and Signature run their course. Expected losses were almost certainly exaggerated. A sound startup could have raised equity and banked elsewhere, and it would have put the fear of God back into the supposedly capitalistic U.S. economy.

But not bailing SVB and Signature out was never an option. Bank failures today are exceedingly rare and would cause a tremendous amount of panic, such as how the collapse of Silvergate Bank essentially a free-floating entity detached from the wider economy led here. And because SVB and Signature rode both the wave of cheap money created by Fed policy up and down, how separate can private and public interests really be?

So, if the U.S. government is officially in the business of bailing out banks, should you keep your money at a bank?

Link:

Should I Keep My Money in Bitcoin or a Bank? - CoinDesk