Bitcoin for the Unbanked: How Mesh and Microfinance Could End Poverty as We Know It

Image courtesy of Barak Bruerd

For cryptocurrencies (specifically Bitcoin) to be a viable solution in sub-Saharan Africa, we will have to deal with two glaring problems: power and internet. A quick look at the World Bank’s chart of nations with access to electricity shows the severity of the need.

In 1990, 0% of the nation of Chad had access to power. In 2016, that number had risen to just 9%. The Democratic Republic of the Congo isn’t much better off, seeing just 17% of all their citizens with power in 2016. Ethiopia, by contrast, has 43%. For the entirety of sub-Saharan Africa, only 16% had access to electricity in 1990, with that number growing to just 43% by 2016.

While there are many incredible interventions that could help deliver power to African nations, let us consider options that will allow individuals to start transacting in cryptocurrency as soon as possible. One such option (among many) that I’ve found is the XTorch.

Image taken from

Taking just 22 hours to fully charge via solar panel, and a mere 1.5 hours via wall adapter, the XTorch can take a smartphone battery to 100% in one charge (for simpler phones such as the ones used in sub-Saharan Africa, one battery life could charge up to three devices), and has a shelf-life of 6–10 years.

Utilizing XTorch’s companion 2.5 watt solar panel attachment, one charge can be completed in just 6 hours. The XTorch alone is ideal for emergency relief situations, whereas the additional external solar panels are often used in longer-term development situations such as the one we are considering. This tool is much more practical and long-lasting than a stand-alone set of solar panels, is easy to use and transport.

With the XTorch we’ve temporarily solved our power problem. We can charge our smartphone and power other devices in remote areas of the world. But, as one would suspect, where there is a lack of electricity, there is also lack of internet, which prevents transacting with cryptocurrencies. This is where local mesh networks come in.

A mesh network is a kind of local area network where network nodes relay information between each other directly without any hierarchal structure, and where nodes cooperate to transmit information as efficiently as possible. Because the network doesn’t rely on any one node exclusively, every node participates equally in the relay of information. Due to this type of work distribution, one node failing rarely results in the network becoming compromised.

One such device that exists to create local mesh networks is GoTenna, a low-power node that uses radio frequencies and bluetooth technology to broadcast information. GoTenna has recently teamed up with Samourai Wallet to create “TxTenna,” a combination of physical tech and software that allows one to transact Bitcoin without the need for an internet connection (check out their site here for a neat graphic on how the process works).

This GoTenna device can be powered through the XTorch via USB cable, and could potentially operate indefinitely if connected to a solar-charged device. This tech is so new and innovative that it can be difficult to wrap your mind around — I stumbled across this helpful step-by-step walkthrough that helped me transact my own Bitcoin offline. The dev responsible was featured in a Bitcoin Magazine article here.

In an ideal world, local communities and microfinance savings groups could operate solely on their individual mesh networks with no outside influence, making them more efficient, accountable, and secure. A simple cold-storage wallet could eliminate the need for a container of paper money, and a multisig Bitcoin wallet could ensure than no one member transacts without the express consent of a majority of the group.

In a real-world sense, this system would look something like this:

  • Nonprofit A sends a micro-loan of 0.1 BTC to Amadi, a woman who runs a savings group in Ethiopia. Amadi stores her loan in a cold-storage wallet that she can access via her smartphone.
  • Since Amadi is the leader of her savings group, she is responsible for dispersing the funds as-needed via her local mesh network that is powered by a GoTenna and a solar-powered XTorch that hangs at the entrance of her hut.
  • Whenever one of the savings-group members needs to withdraw Bitcoin from their fund, they alert Amadi, who sends the proposed need to the rest of the group via WhatsApp. With a majority vote, the funds can be moved from the savings group’s multisig Bitcoin wallet to the private wallet of the recipient.

The beauty of XTorch/GoTenna system is that it could potentially solve many of the problems we’ve discussed thus far, and even a few we haven’t:

  • Protection against corrupt governments
  • Protection against centrally controlled fiat
  • Savings group accountability
  • Quick and fee-free international monetary transfer
  • Creates self-sustaining local economies that were previously non-existent

Granted, there are several glaring problems with this speculative system, including a need for an internet connection eventually for transactions to be broadcast (although it is typical for remote communities to travel in order to solve problems like this one), the prohibitive cost of entry for sub-Saharan natives (which NGOs and micro-loans could potentially help alleviate) and very little context for cryptocurrencies to be accepted as a means of payment. But allowing obvious problems to prevent speculative solutions does no good.

One such speculative solution from Gene Palusky, CEO of XTorch, could look something like this:

  • A large company like Google or Facebook could help bring the last mile internet connection to unreached areas of the world, teaming up with local internet service providers, as this has obvious business advantages
  • Micro financing NGOs could serve to offer loans to fund small business endeavors related to creating local mesh networks
  • Local partner nonprofits could facilitate and manage the project in cooperating with the community, while at the same time integrating interventions that encourage wholistic and sustainable change (donating GoTennas or XTorches as a reward for good school performance, for instance)

read original article here