Using Bitcoin Without Internet

“Bitcoin is the internet’s native currency.”

You may have heard that phrase a few times if you’ve spent a bit of time with bitcoin. And in a lot of ways, it’s true: Bitcoin is breaking down the closed-off barriers between the thousands of payment networks we’ve built up on top of the internet. It’s creating a single, open monetary network for money to flow through, making value transfer as easy as an email, or a text message.

The problem: Much of the world is still lacking basic internet infrastructure. 38%, as of 2022, to be exact.

If bitcoin is to see true mass adoption, the internet needs to spread into these disconnected communities around the world – or, bitcoin chooses a roundabout path, skipping the internet entirely, much like it does with banks.

The truth is: You can use bitcoin without the internet. Though a bit more involved, using bitcoin offline is entirely possible, and in some cases, preferable to staying connected.

How Bitcoin Works With The Internet

First, let’s understand just how intertwined bitcoin is with the internet.

Bitcoin transactions all move through the network’s blockchain — a distributed ledger with thousands of computers (nodes) around the world upholding it. Nodes collectively store duplicate copies of the blockchain and use it to cross reference with new incoming transactions, ensuring that valid transactions process while discarding any double spends.

All of these nodes rely on the internet to broadcast transactions. It keeps nodes informed about transaction data and allows for nodes to easily connect with the Bitcoin network.

Thanks to the internet, bitcoin has been able to grow and facilitate more than 890 million transactions for people around the world and facilitate over 600,000 transactions daily.

Understanding Bitcoin Transactions

Here’s a general breakdown of how Bitcoin transactions work:

1. Initiation: First, the sender specifies the recipient’s Bitcoin address and amount. They then sign the transaction with their private key, which authorizes the transfer.
2. Broadcasting: The sender then broadcasts the transaction to the Bitcoin network. The internet ensures this communication spreads to nodes throughout the network in mere seconds.
3. Transaction verification: Network nodes validate the transaction, ensuring it’s cryptographically signed and not double spent.
4. Block inclusion: The validated transaction then enters the mempool. Miners select it for inclusion in a new block by expending CPU power in an effort to find the right hash for the block.
5. Block verification: Nodes verify the new block’s validity, and add it, along with the transaction inside, to the Bitcoin blockchain.
6. Multiple confirmations: The transaction then continuously undergoes more confirmations as new blocks get added to the ledger, ensuring that it’s a part of the longest-standing chain of transactions, and therefore valid and virtually impossible to undo.

Throughout this process, the internet plays a vital role:

• Communication: Nodes rely on the internet to transmit transaction data and blocks to each other.
• Synchronization: The internet helps to synchronize the blockchain across all nodes, ensuring that everyone is using the same, updated version of the Bitcoin ledger.
• Consensus: Bitcoin uses the internet, rather than trusted third parties, for nodes to communicate and quickly reach consensus about the validity of transactions and blocks.

What Happens To Bitcoin If The Internet Shut Down?

If the internet shut down today, the Bitcoin network would freeze until reestablishing a connection. All previous transaction history would remain intact, but the blockchain wouldn’t be able to process them until it reconnects with nodes able to validate the transactions and miners that can add blocks to the ledger.

It would certainly be a trial by fire for bitcoin, but as we understand decentralization, even Internet outages can’t stop it from functioning.

How To Use Bitcoin Without Internet

Despite the internet’s critical role in upholding the Bitcoin network, that doesn’t mean you specifically have to rely on it too.

At its core, using bitcoin offline means transferring unsigned transactions to an offline medium, signing them there, then transferring them back to the online network to broadcast to other nodes.

That offline environment can look a few different ways, depending on the infrastructure you decide to set up an offline Bitcoin wallet with.

SMS

Simple Short-Message-Service (SMS) text messages are a surprising and convenient way for you to send bitcoin offline.

The service provider Machankura is proving it.

With it, Africans have been able to skip the internet and use text messages to send value instantly among one another. Check out what receiving bitcoin over SMS with Machankura looks like in practice:

Currently, Machankura supports seven different countries within Africa: Ghana, Kenya, Malawi, Namibia, Nigeria, South Africa, and Zambia.

To set up SMS Bitcoin messaging with Machankura yourself, the process is very straightforward.

First you dial your chosen country’s local area code.
Then you receive a Bitcoin wallet and a Lightning address that’s tied to your mobile phone number.

Just by dialing the number, you’ll be greeted with a fresh Bitcoin wallet and a simple interface for you to send and receive bitcoin, view transaction history, barter, and more, depending on what you dial.

Manchankura obviously may not be available to you if you’re not located in Africa, but thankfully, other options still exist.

Samourai developed Pony Direct, an Android-based mobile app for using bitcoin without the internet. While the code is relatively outdated (5 years since last update), the system still works and integrates with other wallets, like Samourai Wallet, to manage transaction data.

Satellite

Blockstream is a long-standing player in the Bitcoin space, bringing products ranging from self-custody wallets to full blown satellites. The Blockstream Satellite enables low-connectivity regions to opt out of using the internet and set up a satellite instead.

With a satellite, you can broadcast Bitcoin transactions and prevent any full node from becoming isolated or partitioned due to network interruptions that normally come with lost internet connection.

There is one small caveat here: The satellite only works for receiving bitcoin, currently, however, that may be subject to change over time as new technology develops.

Radio

In 2019, CoinKite CEO and co-founder Rodolfo Novak demonstrated that you could send bitcoin over radio to another person by having a fellow bitcoiner and Bloomberg Opinion columnist Elaine Ou receive bitcoin over the amateur (HAM) radio frequency.

Novak sent the transaction from his home in Toronto, Canada to Elaine in San Francisco, California.

All it took to make it happen was some basic equipment, including a JS8Call as well as a 7 MHz antenna.

Mesh Network

Mesh networks are decentralized communication pathways that sidestep the need for centralized servers. We’ve used mesh networks in countless industries, both military and commercial, however, their inherent decentralization makes them ideal for receiving bitcoin too.

In 2021, a partnership between Samourai Wallet and goTenna, a mesh network provider, birthed TxTenna, an app that enables BTC transfers without the internet. First, the user syncs their smartphone with a viable goTenna device. After toggling the app’s offline mode, they can now send bitcoin entirely without the internet.

LNMesh is another recent offline Bitcoin innovation from developers. It’s a localized mesh network with nodes that connect to one another through Bluetooth or WiFi instead of the internet.

In the developers’ test, they spread eight Raspberry Pi computers (for $100 each) across a university campus. Instead of using the internet, they set up a local mesh network with Bluetooth and WiFi, showing that you can facilitate Lightning payments in a totally offline environment.

Another caveat to keep in mind is that mesh networks may be limited in location as they’re not as widely dispersed as traditional internet networks right now. Therefore, receivers will need to be relatively close (within miles) of the transaction’s origin, otherwise they may have trouble receiving it.

Nuances To Keep In Mind

So, to recap, understand that each offline method, be it satellite, SMS, radio, or mesh network, each comes with its own set of benefits as well as downsides.

• Radio, mesh networks, and SMS allow you to seamlessly send and receive bitcoin offline.
• Satellites can only receive bitcoin. While not as flexible or ideal as other options, it may still be worth considering if you’re just looking for a basic offline setup to receive bitcoin offline for business or other personal reasons.
• SMS does require a strong cellular service connection to work properly.
• Mesh networks may be location-limited as nodes inherently have constraints as to how far they can transmit data. For a large, robust mesh network, you’ll need very high node density distributed throughout the localized area you want to operate offline within.

Does Bitcoin Survive In Countries Without Internet?

North Korea, South Sudan, Somalia, Burundi, and the Central African Republic make up the top five most internet-lacking countries in the world.

So, what does bitcoin adoption look like in these top five countries then?

• North Korea, understandably, has virtually no Bitcoin adoption due to systemic oppression of its nation’s citizens. However, using bitcoin offline may be one of the necessary keys for its citizens to break free from the regime they’ve been forced under.
• South Sudan, while difficult to find direct data on Bitcoin adoption, does seem to be using bitcoin – enough for its central bank to release a warning to its citizens against using it. It makes sense that bitcoin is on the rise there, given the country’s inflation is pushing over 25%.
• Somalia, while bitcoin adoption isn’t widespread, is one of the most fervent mobile money-using nations in the world, with 73% (ages 16+) of the country relying on it to transfer over $2.5 billion in value each month – 36% of the country’s Gross Domestic Product (GDP).
• Burundi jumped to explicitly ban bitcoin due to “lack of protections” after someone reportedly lost money while trying to trade cryptocurrencies there. With that, you can at the very least deduce that there’s likely high familiarity with bitcoin there.
• The Central African Republic (CAR) has already both adopted bitcoin as legal tender and later repealed that law after failing to account for its lacking infrastructure needs. While Bitcoin adoption is still taking place there, it may be awhile before revisiting bitcoin formally again.

Why Is Using Bitcoin Without Internet Important?

Bitcoin is an open, decentralized monetary network, available for anyone in the world to take advantage of.

In order to fully realize this vision, bitcoin still needs to be accessible to those who don’t have the means to use it – or even hear about it – otherwise. That means being accessible in places where the internet isn’t.

Additionally, having to solely rely on the internet for transactions introduces potential vulnerabilities. While perhaps not systemic, unexpected internet blackouts, satellite failures, government censorship, or a host of other issues could pose a risk to the internet’s widespread availability. That risk potential would affect bitcoin too if it weren’t able to work offline.

Just as you keep backups of your private key, consider the backups you have in place to interact with bitcoin in case you don’t have the internet or face other connectivity issues.

Final Thoughts

Bitcoin is a resilient protocol. Thanks to its decentralization, it’s virtually impossible to have the network succumb to a single point of failure.

While using bitcoin offline certainly may be a bit more burdensome, it may just be a life-saving measure for others. For those in disconnected regions looking to move their wealth safely, there’s no safer method than by broadcasting a fully air-gapped transaction on the Bitcoin blockchain.

The internet will likely remain the dominant rails that Bitcoin transactions will run on, but having the optionality to move the money however you please is what makes bitcoin self-sovereign technology.

Ultimately, capabilities like this are what can usher in hyperbitcoinization. Ever since this technology went live in 2009, we’ve been discovering countless innovations that weren’t possible prior to bitcoin.

Along with the emergence of other technologies, bitcoin is revealing to the world an entirely new way to think about value transfer, money, and how we conduct everyday payments.

FAQs About Using Bitcoin Offline

Q: Is it safe to transact with Bitcoin offline?
A: Yes, transacting with Bitcoin offline can be totally safe, as long as you carefully follow Bitcoin safety practices and are using trusted hardware. It’s crucial that you make the offline environment secure, free from malware, and clear from unauthorized private key access.

Q: Can I set up my own mesh network for Bitcoin transactions?
A: Setting up your own mesh network for Bitcoin transactions is definitely feasible. However, it does require a blend of technical expertise, compatible software, and specific hardware tools. Research thoroughly and maybe even consult with an expert before you dive in.

Q: How do Bitcoin offline wallets work?
A: Bitcoin offline wallets store private keys on a medium that’s disconnected from the internet. Whether it’s on paper, hardware devices, or even air-gapped computers, the common thread between them all is that you have to sign it in the offline environment, then transfer the signed transaction to an online environment for broadcast to the network. This process ensures your private key never gets exposed to online threats.

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