Bitcoin Street Store: our entry for the Nostrasia Hackathon

The problem

Did you know that there are over 100 million African merchants and only 28% of e-commerce penetration?

In the rapidly evolving digital age, millions of African merchants are still disconnected from the digital market. This disconnection is primarily due to factors such as lack of access to reliable internet, inadequate digital literacy, and infrastructural challenges. As a result, these merchants are unable to leverage the benefits of e-commerce platforms, digital payment systems, and online customer bases, which hampers their business growth and economic development.

Moreover, these merchants often have to rely on middlemen who control access to markets and charge high fees, thereby reducing their profit margins. These middlemen can also create a barrier to market information, preventing merchants from making informed business decisions. The lack of digital connectivity exacerbates this issue as it limits the merchants’ ability to bypass these middlemen and directly access the market.

In addition to these challenges, African merchants face several other problems due to being disconnected from the digital market. They are restricted to their local markets and cannot reach a wider customer base. Their business operations are inefficient without digital tools and platforms. Tasks such as inventory management, sales tracking, and customer relationship management become challenging and time-consuming without digital solutions. Without a digital financial footprint, these merchants may find it difficult to secure loans or other forms of credit. This can hinder their ability to invest in their businesses and grow. Even when some form of digital infrastructure is available, the lack of necessary digital skills among the merchants can prevent them from effectively utilizing these resources.

Our solution

We believe that Bitcoin, the Lightning network and Nostr are tools for economic empowerment, directly addressing the challenges stated above. By providing a decentralized and globally accessible financial system, Bitcoin & Lightning can enable African merchants to bypass traditional banking systems and middlemen, thereby expanding their market reach and improving profit margins. It also offers a secure and transparent platform for financial transactions, which can help build a digital financial footprint for these merchants, facilitating easier access to credit.

Nostr, on the other hand, can offer a platform for these merchants to directly connect with the global market, reducing their dependence on middlemen.

Together, Bitcoin, Lightning and Nostr can play a crucial role in integrating African merchants into the digital economy, fostering economic growth and development in the region.

However, there's one particularity in Sub-Saharan Africa – millions still remain disconnected from the Internet. While most of the adult population has access to mobile phones, only about 40% of adults over 18 years of age were using mobile internet, according to GSMA. This is the reason that a legacy technology called USSD (Unstructured Supplementary Service Data) plays a significant role in Africa's digital transformation. USSD is available to both feature phones and smartphones, allowing it to reach a broader audience compared to mobile apps. Machankura, a custodial Lightning wallet available over USSD in multiple African markets, is already leveraging this opportunity and letting anyone pay and get paid.

So, we are providing access to Nostr-based digital commerce tools over USSD, in order to enable merchants to create and manage their stores without Internet connection.

What did we build?

As we wrote in our introduction last week, Bitcoin Street Store was originally conceived during the Build for Africa Hackathon hack week and built for just 5 days between 16 and 20 October.

During the Build for Africa Hackathon, we build several key building blocks of the Bitcoin Street Store:

Bitcoin Street Store Services – a microservices-based backend that orchestrates the processes in the platform and acts as a Nostr identity (nsec) agent for the merchant users, who have access over USSD and thus cannot manage their own private keys. (In future, we aim to create a trust-minimized platform, which keeps the private keys encrypted at rest and only decrypted in-memory via the private PIN code of the user.) As a core ledger, we use LNbits, which manages individual Lightning wallets for each merchant and their stores on Nostr via its Marketplace extension.
Bitcoin Street Store Agent App – to help onboard merchants, we rely on ambassadors who act as agents for the merchants, inviting them to the platform and creating their store & products. All changes are approved by the merchants before published.
Merchant USSD interface – a set of interactive menus that let merchant manage their store – approve changes, view orders, mark them as shipped, monitor their balance and withdraw it to their own Lightning wallet.

For the Nostrasia Hackathon, we used the past week to make the following important additions to the platform:

We added the following features to the Bitcoin Street Store Services & USSD interface:
- We provisioned a new LNbits instance on Voltage in order to ensure channel liquidity and connectivity, making the platform ready for real commerce!
- We completed the orders functionality – buyers can now use our (or any Nostr-compliant) marketplace app to make an order, pay via Lightning, and exchange direct messages with the merchant.
- We created an initial version of our escrow functionality – after making the payment, the buyer receives a delivery code with an encrypted Nostr direct message; when the goods are delivered, the buyer has to announce the code back to the merchant or the delivery person; the merchant can input the delivery code in their USSD menu to unlock the payment.
We forked LNbits' nostr-market-app to create a Bitcoin Street Store curated marketplace with small African merchants – and we also contributed back an important improvement to the LNbits project, adding support for Nostr browser extensions such as Alby.

Next steps

This season is shaping up to be very busy.

We are continuing to build during Legends of Lightning 2 with the aim to build a non-custodial escrow system and get the platform production-ready. The first real sats have already started to flow, but we have big plans!

Meanwhile, we will onboard our first merchants on the ground in Ghana. Kumi Nkansah from Bitcoin Cowries has already a waitlist of 10+ merchants who are ready to put their goods on the Bitcoin Street Store online. We plan to ramp up our go-to-market efforts in preparation for the Africa Bitcoin Conference to be held Accra in the beginning of December.

Please support our merchants, and reach out if you can help us create more positive impact.

P.S. Wen Nostrafrica?

Team

Kumi Nkansah (Bitcoin Cowries) – the man with the idea & feet on the ground in Ghana
Radoy Stoyanov (Growr) – UX & UI, frontend engineering, copywriting
Valentin Genev (Growr) – architecture, backend engineering, DevOps
Zhivko Angelov (Growr) – product management, backend engineering

Tech stack

Back-end:
- Node.js and Moleculer.js
- MongoDB
- LNbits + extensions – ledger/Lightning wallet management and Nostr store backend
- Africa's Talking – USSD gateway
Front-end:
- Bitcoin Street Store Agent App: Next.js V13, TypeScript, Tailwind CSS, React Query, Formik, Zod and Nostr Tools
- Marketplace App: Quasar/Vue.js