Mobile money slowly turning East Africa into cashless society

[cypherdoc]

NYT article on the international money transfer business atm, ie WU $10 fee to send $50 = 20% & a rip off exchange rate on top of that too

http://www.nytimes.com/2012/06/02/business/new-rules-for-money-transfers-but-few-limits.html?_r=1

i think i'm going to go short this puppy first thing Monday:

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[nimda]

This is already possible. Coinapult allows controlling bitcoin funds via SMS

[Stephen Gornick]

This is already possible. Coinapult allows controlling bitcoin funds via SMS

Coinapult's service is limited to U.S. and Canada numbers for now. 

Plus, they rely on 1% fee from users of API, but they have to pay for each SMS.  i.e., they may need to make some adjustments in fees in order to expand or maintain current service even.

But when they do figure it out, ... this will definitely finally let Bitcoin permeate to developing nations.  SMS wallets are a big deal.

[Jan]

What I am concerned with is "the Linode problem".  All these mobiles are managed devices.   They can be fully controlled by someone other than the owner of the device.  Yes, they are managed by the carrier but possibly that carrier has people that cannot be trusted or, just as bad, has people who don't maintain secure systems themselves such as what reportedly is what happened at Linode.

I don't know where you buy your phone and what deal you have with your carrier. Both my android and iPhone were purchased at full price and unlocked and my SIMs purchased independently. My carrier is in no position to snoop into or alter any apps on my phones.

[Stephen Gornick]

I don't know where you buy your phone and what deal you have with your carrier. Both my android and iPhone were purchased at full price and unlocked and my SIMs purchased independently. My carrier is in no position to snoop into or alter any apps on my phones.

This is the type of threat I'm describing:
 - http://www.theverge.com/2012/5/18/3028207/zte-score-backdoor-vulnerability-confirmed-skate
 - http://security.stackexchange.com/questions/15076/i-found-that-the-company-i-work-for-is-putting-a-backdoor-into-mobile-phones

[Jan]

I don't know where you buy your phone and what deal you have with your carrier. Both my android and iPhone were purchased at full price and unlocked and my SIMs purchased independently. My carrier is in no position to snoop into or alter any apps on my phones.

This is the type of threat I'm describing:
 - http://www.theverge.com/2012/5/18/3028207/zte-score-backdoor-vulnerability-confirmed-skate
 - http://security.stackexchange.com/questions/15076/i-found-that-the-company-i-work-for-is-putting-a-backdoor-into-mobile-phones

Thanks for the links. If you buy an iPhone buy it directly from Apple and not for 1$ with a crazy plan and software pre-installed by your carrier. If you buy an android nuke it with your favorite open source package.

[DublinBrian]

Iphones come pre-installed with the keylogger made by CarrierIQ

Carrier IQ, the now infamous “rootkit” or “keylogger”, is not just for Android, Symbian, BlackBerry, and even webOS. In fact, up through and including iOS 5, Apple has included a copy of Carrier IQ on the iPhone. However, it does appears to be disabled along with diagnostics enabled on iOS 5; older versions may send back information in more cases.

http://blog.chpwn.com/post/13572216737

[Jan]

Iphones come pre-installed with the keylogger made by CarrierIQ

Carrier IQ, the now infamous “rootkit” or “keylogger”, is not just for Android, Symbian, BlackBerry, and even webOS. In fact, up through and including iOS 5, Apple has included a copy of Carrier IQ on the iPhone. However, it does appears to be disabled along with diagnostics enabled on iOS 5; older versions may send back information in more cases.

http://blog.chpwn.com/post/13572216737

Read the page you linked to. It is not a key logger.

[cypherdoc]

Iphones come pre-installed with the keylogger made by CarrierIQ

Carrier IQ, the now infamous “rootkit” or “keylogger”, is not just for Android, Symbian, BlackBerry, and even webOS. In fact, up through and including iOS 5, Apple has included a copy of Carrier IQ on the iPhone. However, it does appears to be disabled along with diagnostics enabled on iOS 5; older versions may send back information in more cases.

http://blog.chpwn.com/post/13572216737

Read the page you linked to. It is not a key logger.

Would you mind sharing how you"nuked" your Android?

[Jan]

Iphones come pre-installed with the keylogger made by CarrierIQ

Carrier IQ, the now infamous “rootkit” or “keylogger”, is not just for Android, Symbian, BlackBerry, and even webOS. In fact, up through and including iOS 5, Apple has included a copy of Carrier IQ on the iPhone. However, it does appears to be disabled along with diagnostics enabled on iOS 5; older versions may send back information in more cases.

http://blog.chpwn.com/post/13572216737

Read the page you linked to. It is not a key logger.

Would you mind sharing how you"nuked" your Android?

I use CyanogenMod: www.cyanogenmod.com
There are probably others.

[cryptoanarchist]

Cheap Android phones are starting to take over even in Africa. I tried the Bitcoin Wallet app on a phone being sold in Kenya for about $80, it worked fine.

By the time Bitcoin has become big/interesting enough to make real headway in poorer countries the concept of a non-smart phone won't exist. As Apple is unlikely to ever make a real assault on the low end of the market, I think almost all of these devices will be cheap Chinese-manufactured Androids, which is perfect for us.

I know people in/from Nigeria, and this is definitely true. More people access the internet there with smart phones than with computers.

Perhaps the real problem with introducing Bitcoin in Africa (or any other developing economy) is to identify the killer application that will motivate people to give it a try.  The only really compelling application I've heard of would be remittances from abroad.  I have read that currently those with out bank accounts must rely on Western Union and pay up to a 20% transfer fee.

+ a million. You couldn't have hit the nail more on the head here.

[bitlizard]

Cheap Android phones are starting to take over even in Africa. I tried the Bitcoin Wallet app on a phone being sold in Kenya for about $80, it worked fine.

Smartphones are now at 50% penetration in the U.S. (with 2/3rd of all new phones sold being smartphones as well):



 - http://www.businessinsider.com/chart-of-the-day-smartphone-penetration-2012-3

Well, if they are android phones, that just gives them a free way to run a bitcoin app. Even though the phone will be free,

What I am concerned with is "the Linode problem".  All these mobiles are managed devices.   They can be fully controlled by someone other than the owner of the device.  Yes, they are managed by the carrier but possibly that carrier has people that cannot be trusted or, just as bad, has people who don't maintain secure systems themselves such as what reportedly is what happened at Linode.

The importance is thiis.  An attack that defrauds M-Pesa's customers en mass means Safaricom figures out at some point that there's a problem, halts all affected systems to prevent further losses, and in the end eats some, most or all of the customer's losses.  A similar attack through the managed services of the mobile network to steal bitcoins from mobiles means just that the individual mobile user alone loses out.  Just like how Linode disavowed any responsibility to Slush, Bitcoinica, etc. for the tens of thousands of bitcoins lost, Safaricom would likely maintain the same position.

So, this is a fundamental question -- is the practice of storing bitcoin private keys on the mobile something that exposes it to too much risk to where it shouldn't even be considered?  i.e., bitcoin apps for mobile need to be under the same model that mobile banking (like M-Pesa) uses?

could the problem be solved with cold storage? like a thumbdrive with a wallet.dat file and some level of encryption?  A thumb drive could make a great vault for someone store their wealth cheaply and with a relatively high level of security in a third world country. 

[Jan]

Cheap Android phones are starting to take over even in Africa. I tried the Bitcoin Wallet app on a phone being sold in Kenya for about $80, it worked fine.

Smartphones are now at 50% penetration in the U.S. (with 2/3rd of all new phones sold being smartphones as well):



 - http://www.businessinsider.com/chart-of-the-day-smartphone-penetration-2012-3

Well, if they are android phones, that just gives them a free way to run a bitcoin app. Even though the phone will be free,

What I am concerned with is "the Linode problem".  All these mobiles are managed devices.   They can be fully controlled by someone other than the owner of the device.  Yes, they are managed by the carrier but possibly that carrier has people that cannot be trusted or, just as bad, has people who don't maintain secure systems themselves such as what reportedly is what happened at Linode.

The importance is thiis.  An attack that defrauds M-Pesa's customers en mass means Safaricom figures out at some point that there's a problem, halts all affected systems to prevent further losses, and in the end eats some, most or all of the customer's losses.  A similar attack through the managed services of the mobile network to steal bitcoins from mobiles means just that the individual mobile user alone loses out.  Just like how Linode disavowed any responsibility to Slush, Bitcoinica, etc. for the tens of thousands of bitcoins lost, Safaricom would likely maintain the same position.

So, this is a fundamental question -- is the practice of storing bitcoin private keys on the mobile something that exposes it to too much risk to where it shouldn't even be considered?  i.e., bitcoin apps for mobile need to be under the same model that mobile banking (like M-Pesa) uses?

could the problem be solved with cold storage? like a thumbdrive with a wallet.dat file and some level of encryption?  A thumb drive could make a great vault for someone store their wealth cheaply and with a relatively high level of security in a third world country. 

You still need to load the thumb drive / SD card into a trusted network connected computing device to do transactions. I would prefer a stripped down phone over some PC anytime. And, a phone is a lot cheaper plus easier to operate. BitcoinSpinner can actually almost do this seamlessly. A village can share a stripped down android phone and each user has his own QR-code backup on paper. To do a transaction you restore your backup, do your transaction, and restore some empty account. Your private keys are only in memory until you restore the empty account. A "clear" button could be added to eliminate the last step.
Thoughts?

[nimda]

lol, GMail picked this thread's reply email up as spam. Let's see...
"Money", "Africa", "Wealth", "Kenya", "Bank"

All it needs is "Nigeria" to be complete!

[bitlizard]

Cheap Android phones are starting to take over even in Africa. I tried the Bitcoin Wallet app on a phone being sold in Kenya for about $80, it worked fine.

Smartphones are now at 50% penetration in the U.S. (with 2/3rd of all new phones sold being smartphones as well):



 - http://www.businessinsider.com/chart-of-the-day-smartphone-penetration-2012-3

Well, if they are android phones, that just gives them a free way to run a bitcoin app. Even though the phone will be free,

What I am concerned with is "the Linode problem".  All these mobiles are managed devices.   They can be fully controlled by someone other than the owner of the device.  Yes, they are managed by the carrier but possibly that carrier has people that cannot be trusted or, just as bad, has people who don't maintain secure systems themselves such as what reportedly is what happened at Linode.

The importance is thiis.  An attack that defrauds M-Pesa's customers en mass means Safaricom figures out at some point that there's a problem, halts all affected systems to prevent further losses, and in the end eats some, most or all of the customer's losses.  A similar attack through the managed services of the mobile network to steal bitcoins from mobiles means just that the individual mobile user alone loses out.  Just like how Linode disavowed any responsibility to Slush, Bitcoinica, etc. for the tens of thousands of bitcoins lost, Safaricom would likely maintain the same position.

So, this is a fundamental question -- is the practice of storing bitcoin private keys on the mobile something that exposes it to too much risk to where it shouldn't even be considered?  i.e., bitcoin apps for mobile need to be under the same model that mobile banking (like M-Pesa) uses?

could the problem be solved with cold storage? like a thumbdrive with a wallet.dat file and some level of encryption?  A thumb drive could make a great vault for someone store their wealth cheaply and with a relatively high level of security in a third world country. 

You still need to load the thumb drive / SD card into a trusted network connected computing device to do transactions. I would prefer a stripped down phone over some PC anytime. And, a phone is a lot cheaper plus easier to operate. BitcoinSpinner can actually almost do this seamlessly. A village can share a stripped down android phone and each user has his own QR-code backup on paper. To do a transaction you restore your backup, do your transaction, and restore some empty account. Your private keys are only in memory until you restore the empty account. A "clear" button could be added to eliminate the last step.
Thoughts?

LOL sounds totally user friendly and intuitive! One big obstacle that bitcoin has is with userfriendlness, and I am qualified to talk about this as I am an absolute computer noob compared to 99% of the people on this forum. If the bitcoin community want to use bitcoin to solve economic problems in third world countries then IMO it must address userfriendlyness first and unfortunately we are not quite there yet.  My original thought on the flashdrive vault was that a trusted third party would sell a flashdrive with a unique .dat file on it and give the purchaser a public key that was associated with the .dat file, but now that I think about it, the idea presents a serious and obvious moral hazard that the issuer could copy and later steal the data and btc on the drive. So i guess that idea is not valid. Is there really no way to secure a phone to the point that not even the service provider could hack it?

[conspirosphere.tk]

Want to become an internet billionaire? Move to Africa
By David Rowan 04 November 11

...Seriously. The internet is only now arriving, and -- with a billion people on the continent still mostly offline -- there exists a once-in-a-lifetime opportunity to build the next Zyngas, eBays and Groupons for a huge untapped local market.
...
A few obvious markets primed for explosive growth:

Mobile money
Who needs banks if you can use your mobile to send and receive cash? More than a quarter of Kenya's GDP now passes through a phone-to-phone network called M-Pesa, and in Uganda MTN MobileMoney has almost two million users. As Cameron put it in a speech to Lagos Business School, "Today, mobile banking systems mean we can cut out middlemen and make a direct impact on the lives of small farmers who can produce more food, feed their families, sell more food at the market and in turn buy more seed."

E-commerce
You don't need a smartphone, let alone a PC, to shop online. The American startup SlimTrader runs a service called MoBiashara, which lets African consumers shop by mobile on basic cellphones. And there are half a billion of those in Africa.

Read all:
http://www.wired.co.uk/news/archive/2011-11/04/get-rich-move-to-africa

[Stephen Gornick]

Interesting article about Paga in Lagos. Nigeria:

The business officially opened in early 2011 after receiving approval from the Central Bank of Nigeria.

Paga now employs 68 and has more than 42,000 Nigerian customers who can transfer money, purchase airtime credit, and pay bills with their cell phones using the system. Investors in the company include Timothy Draper, founder of global venture capital firm Draper Fisher Jurvetson

Draper is an investor in CoinLab (Seattle, WA).

He dialed a colleague's cell phone number in Nigeria and punched in the amount of money he wanted to transfer to her from his Paga account, followed by his PIN number. After a few moments, a recorded voice confirmed the transaction, while a text message alerted his colleague about how much money had been sent. The entire process took about 35 seconds. There's no charge to pay bills or add cell phone airtime, but mobile money senders are charged a fee based on the amount transferred.

Sending as an IVR (interative voice response).    There was an IVR wallet project that was abandoned and then open sourced, but nobody continuing it.
 - http://bitcointalk.org/index.php?topic=43734.0

The company has a network of 550 agents, typically mom-and-pop merchants who already run grocery stores or pharmacies. Customers can go to those agents to deposit cash into their Paga accounts, and then conduct mobile transactions using those funds. The company also has a partnership with several Nigerian banks that accept Paga account deposits. So far, Oviosu said the average transaction size is modest, about 3,000 Nigerian naira, which is the equivalent of about $20 U.S.

That's where bitcoin growth can go from nothing and explode into ubiquity in a short while.  Here, each of those 550 agents earns a commission for accepting cash, as a trusted partner in Paga's network.  But with bitcoin, there can be 5,500 agents,  55,000 agents.  etc.,  ... each acting as an independent exchanger.  Because they don't need some mobile carrier's permission to be an "agent", this will be a necessary prerequisite for Bitcoin's growth (yet at the same time its biggest reason for succeess over competing, carrier-based approaches).

 - http://www.gsb.stanford.edu/news/headlines/oviosu_mobile_2012.html

[Stephen Gornick]

Incidentally, Blockchain.info now supports a method to send funds to any mobile number.  (The text sent contains a URL that is used on the mobile's web access to store the funds in a Blockchain.info wallet or to forward the bitcoins elsewhere.  Data service is required to do that from the mobile.)




 - https://blockchain.info/wallet/send-via
 - http://bitcointalk.org/index.php?topic=40264.msg1000327#msg1000327


As that URL sent is a bearer code (spendable by anyone with access to the data), I question whether this approach, and consider another problem due to SMS being a channel controlled by the government here:

 - http://bitcointalk.org/index.php?topic=90901.0

[Stephen Gornick]

Now that Bitcoin Nordic accepts payments using CashU, which in turn accepts UKash vouchers for adding funds, bitcoins can now be purchased in quite a few more countries:

in Africa this include:


 - Algeria
 - Egypt
 - Ghana
 - Libya
 - Morocco
 - Nigeria
 - South Africa
 - Tunisia

Additionally, funds to CashU can be sent online in:

Algeria, Gambia, Ghana, Kenya, Libya, Mauritius, Morocco, Nigeria, Sierra Leone, Tanzania, Tunisia in addition to many others in the Middle East as well.

 - http://en.bitcoin.it/wiki/UKash#Africa
 - http://en.bitcoin.it/wiki/Bitcoin_Nordic
 - http://www.BitcoinNordic.com

[Ichthyo]

Now that Bitcoin Nordic accepts payments using CashU, which in turn accepts UKash vouchers for adding funds, bitcoins can now be purchased in quite a few more countries...

While I like the general Idea of pushing the use of bitcoins into parts of the world with weak governmental infrastructure, the offer of Bitcoin Nordic doesn't exactly look like it can be a game changer....

cashU is a prepaid payment service. To buy bitcoins using cashU you need to create a cashU payment account.
....

Price
Price will be MtGox USD 24 hour average +15% at the time of processing which is currently 8.721991 USD.

Well, Western Union isn't cheap either, but really, do we expect people to pick up something quite novel and challenging (where you have to care yourself for security and infrastructure, especially if you're a merchant) at such a premium?

Just my 0.02 BTC

-- Ichthyo