Mahala Mobile - a local mobile marketing and technology company - aims to encourage crypto currency uptake in SA by unveiling a local version, dubbed Madibacoin, in the coming months.
The digital currency is based on the principles of Bitcoin, which allows users to send payments within a decentralised, peer-to-peer network, without the need for a clearing house such as a bank. Madibacoin developers, however, are looking to enable users to exchange their earned coins for airtime.
Dr Neil Croft, owner of Mahala Mobile, says Madibacoin will look to gain traction by being relevant to millions of SA's cellphone users, although mining coins is limited to certain devices. "The starting point for us is to allow users to mine coins using PCs and laptops, and then top it off for airtime. It's not yet viable to mine on phones, unless you own a smart device," he says.
According to Croft, Mahala Mobile aims to partner with companies with direct links to SA's mobile operators, as it bids to facilitate seamless airtime purchases for users.
New users will be able to install Madibacoin wallets on their computers and create addresses, which can be used for transactions across the network.
Bitcoin enthusiast Haroun Kola describes the airtime exchange offer as a "masterstroke", considering SA's high cellphone penetration. "If you can tie the launch into something that people are already using, then that can positively influence the uptake.
"SA is only starting to get into a crypto currency market, which has already existed for a while in first world countries, so this might be a decent way to address local needs," adds Kola.
Security concerns
Madibacoin transactions are secured by what Mahala Mobile describes as "military-grade cryptography", and Croft says adequate measures have been taken to avoid large-scale breaches similar to those resulting in the loss of thousands of Bitcoins by the Mt. Gox exchange.
"We do not have any cloud-based wallets. This opens the door for potential attacks and a place for a single targeted attack," says Croft.
"As Madibacoin, the P2P network as a distributed network makes it very difficult to defraud. The network verifies transactions, making it impossible to manipulate the block chain.
"I equate Mt. Gox to what happened in the Wild West when banks began and people rode in on horseback and robbed them, but the many bank robberies over time haven't resulted in banks ceasing to exist. It just means that security had to be improved," says Croft.
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