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Abstract

🔹 In many regions with limited internet connectivity, as well as in crisis situations such as natural disasters or political unrest, access to traditional financial systems and internet-based cryptocurrency solutions becomes difficult or even impossible. This digital divide excludes millions of people from participating in decentralized finance (DeFi) and utilizing the benefits of blockchain technology.

🔹 This white paper introduces SMSChain , an innovative solution that enables cryptocurrency transactions via SMS, ensuring inclusivity and financial resilience in any environment. By leveraging mobile networks, users can send, receive, and manage their crypto assets without requiring an internet connection or a smartphone with advanced capabilities.

🔹 Our approach integrates secure wallet management, transaction execution, and balance inquiries while maintaining the core principles of blockchain security. Using a combination of encrypted message formats, smart contract automation, and multi-layer authentication, we provide a seamless, robust, and accessible system for global cryptocurrency adoption.

🔹 Beyond accessibility, SMSChain enhances financial sovereignty by reducing reliance on centralized institutions and expanding blockchain’s usability to the unbanked and underbanked populations worldwide. This project represents a crucial step toward making decentralized finance truly universal, ensuring that anyone with a basic mobile phone can interact with the blockchain securely and efficiently.

Introduction

• Cryptocurrencies promise financial freedom and accessibility, but they rely heavily on internet connectivity for wallet management and transaction processing.

• This dependence excludes individuals living in rural areas, regions with fragile infrastructure or during natural disasters.

• In this document, we aim to describe a system that leverages SMS to facilitate cryptocurrency transactions, ensuring that no one is left behind wherever you are and whatever the context.

Problem Statement

Despite the growing adoption of cryptocurrencies, several key challenges hinder their global accessibility and practical use, particularly in underserved regions and crisis situations:

🔹 Internet Dependence – Most cryptocurrency systems rely on a stable and continuous internet connection for transactions, wallet access, and blockchain verification. However, nearly 37% of the global population lacks reliable internet access, especially in rural, remote, and developing areas. This dependence limits the financial inclusion potential of blockchain technology.

🔹 Lack of Resilience – In times of natural disasters, political unrest, or economic crises, internet infrastructure is often the first to be disrupted. Power outages, cyberattacks, or government-imposed shutdowns can completely cut off access to digital financial services, rendering traditional cryptocurrency wallets and exchanges inaccessible when they are needed the most.

🔹 Exclusion of the Unbanked – Over 1.4 billion people worldwide remain unbanked, meaning they lack access to conventional banking services, let alone internet-based cryptocurrency solutions. Many of these individuals rely solely on basic mobile phones with SMS capabilities, making it impossible for them to participate in decentralized finance (DeFi) under the current internet-dependent model.

🔹 High Cost of Mobile Data – In some regions, internet data is prohibitively expensive, making frequent access to cryptocurrency networks financially unsustainable. Users in Africa, South Asia, and Latin America often face exorbitant costs for mobile internet, discouraging them from engaging with blockchain-based financial services.

🔹 Vulnerability to Internet Censorship – Some governments impose internet restrictions and censorship, limiting access to cryptocurrency exchanges, wallet services, or blockchain nodes. This regulatory interference can prevent citizens from managing their digital assets freely and securely.

🔹 Security Concerns in Unstable Environments – In areas with poor cybersecurity infrastructure, internet-dependent wallets are more susceptible to hacks, phishing attacks, and centralized exchange failures. Users in vulnerable regions need a safer, more resilient way to store and transact cryptocurrency without depending on high-risk online platforms.

Without an alternative to internet-based crypto transactions, these challenges hinder financial inclusion, emergency resilience, and the true decentralization of blockchain technology. This paper proposes a secure, SMS-based solution to bridge this gap, allowing users to interact with cryptocurrencies without requiring an internet connection.

Proposed Solution

Our solution introduces an innovative system enabling users to execute cryptocurrency transactions via SMS, effectively removing reliance on traditional internet infrastructures. By leveraging SMS-based interactions, we ensure that users can send, receive, and manage their digital assets using basic mobile phones, making cryptocurrency truly accessible to all, even in regions with limited or no internet connectivity.

🔹 Decentralized and Secure SMS Transactions – Users will be able to send, receive, and check balances of their cryptocurrencies by simply sending SMS commands to a designated number. Transactions will be signed offline to maintain security, then relayed to the blockchain via SMS gateways and trusted relayer nodes.

🔹 Seamless Wallet Integration – Each user will have a dedicated wallet address linked to their phone number (hashed for privacy). Transactions are processed using smart contracts, ensuring transparency and minimizing the risk of centralized control.

🔹 Multi-Layered Security Architecture – Security is a core feature of our system, with mechanisms such as:

• One-Time Passwords (OTP) via SMS to prevent unauthorized access.

• Private key encryption and secure storage to ensure funds remain protected.

• Multi-signature transaction verification to enhance trust in high-risk environments.

🔹 SMS Relayer Network – A network of trusted relayers will act as intermediaries, receiving SMS transaction requests and broadcasting them to the blockchain. These relayers ensure:

• Efficiency : Transactions are processed within seconds.

• Decentralization : No single entity controls the system.

• Resilience : Works in areas where internet access is restricted or costly.

🔹 Cross-Border Compatibility – The system is designed to be compatible with multiple cryptocurrencies (e.g., Ethereum, Bitcoin, stablecoins) and can be extended to support custom blockchain networks. This flexibility allows users to engage in cross-border transactions without relying on internet-based exchanges.

🔹 Emergency & Disaster Resilience – In crisis situations where internet connectivity is down, users can still access their funds, make payments, and send emergency transfers, ensuring financial independence and stability even in the most challenging environments.

🔹 Affordable and Scalable Model – The use of SMS-based crypto transactions significantly reduces cost barriers associated with mobile data usage. This model is scalable across various geographies and economic conditions, making financial inclusion a reality for the unbanked and underserved populations.

Our SMS-powered cryptocurrency transaction system provides a resilient, secure, and inclusive alternative to traditional internet-based blockchain access. By bridging the digital divide, it enables millions of people worldwide to participate in decentralized finance (DeFi) without needing an internet connection.

Universal accessibility :

• Our solution is based on simplified interaction via a smartphone, without the need for a mobile data connection or a specific application on the user side as long as you are registered on SMSChain.

• The sms interface acts as a thin client, interacting with a decentralized backend.

Transaction security and integrity :

• Transaction authentication is based on a cryptographic signature mechanism generated locally and transmitted securely.

• Each transaction is recorded on the blockchain after validation of the private signature associated with the sender, preventing any falsification or malicious interception.

Blockchain interoperability :

• The system is initially designed to support the Ethereum blockchain with autonomous smart contracts managing the conversion of transactions and the routing of funds to the targeted address.

Resilience to network outages :

• Operating independently of Internet infrastructures, our technology is based on a relay server, capable of processing requests in real time via sms API, guaranteeing reliability in areas with low connectivity or in the event of prolonged Internet network outages.

System Architecture

1. Wallet Management

🔹 For our first version of the app, users can register via the SMSChain web platform (coming soon) and associate their phone number with their MetaMask wallet via an SMS verification process.

🔹 Upon registration, a unique and secure private key is generated for each user, this key is stored in encrypted form and will be used to sign transactions, without direct exposure to the user.

🔹 Sending cryptocurrencies by SMS: Once registered, the user can carry out transactions by sending a simple SMS structured according to a standardized format (e.g.: SEND 0.5 ETH TO 0x123...), the sending number will be defined before the release of the first version.

🔹 Transaction tracking and history: Each executed transaction is immediately integrated into the blockchain, and the user can view their entire on-chain transaction history directly from the SMSChain web application.

🔹 SMS notifications will be sent to confirm the success or failure of each transaction, ensuring complete transparency.

2. Transaction Process

🔹 As mentioned previously, users send a structured SMS to the telephone number of our relay, as well as the amount and address of the transaction (on eth or tokens from the ethereum ecosystem).

🔹 The system analyzes and processes these inputs to ensure compatibility with the blockchain format.

🔹 Before transmission, the transaction is signed locally on the user's device using their private key, ensuring end-to-end security.

🔹 This prevents the relay server from accessing or storing sensitive information.

🔹 The signed and encrypted transaction is sent via the cellular network (SMS or USSD protocol) to our relay server, which acts as an intermediary between the telecom infrastructure and the blockchain network.

3. Server Functionality and Technical Details ⚙️

🔹 Before being broadcast on the blockchain, the transaction undergoes several security checks

Cryptographic signature validation :

🔹 The server uses Elliptic Curve Digital Signature Algorithm (ECDSA) to ensure that the signature matches the user's public key.

Checking the balance and gas costs :

🔹 The server queries an Ethereum (Infura) node via RPC to check if the sender has sufficient funds in their wallet linked to the web application.

Detection of anomalies or attempted fraud :

• Anti-replay control algorithms and suspicious transaction monitoring.

• Once validated, the transaction is broadcast to the blockchain via a secure RPC node.

At this point :

• A confirmation sms is sent to the sender, indicating the transaction ID (TX Hash) and processing status.

• Transaction history is updated in the SMSChain web interface, allowing users to track the progress of their payments.

• In the event of a failure (e.g. insufficient balance, signature error), a detailed error message is returned to the sender.

Infrastructure :

• Optimized database (MySQL/PostgreSQL) to store pending transactions and user history.

• Load balancing and failover system allowing you to manage a large number of simultaneous requests.

• Transaction logs and monitoring with tools like Prometheus to ensure real-time monitoring.

Thanks to this architecture, the SMSChain server ensures speed, reliability and security in the execution of SMS transactions, without direct dependence on an Internet connection for the user.

Cryptography :

• Our SMS-based cryptocurrency transaction system employs a multi-layered cryptographic approach to ensure data security, transaction integrity, and user privacy. The following cryptographic techniques are used to safeguard wallet management, transaction processing, and data transmission :

  🔹 RSA-2048 – Secure Wallet Key Management

  • RSA-2048 is implemented for asymmetric encryption to securely manage wallet private keys.

  • Private keys are encrypted before being stored or transmitted, ensuring they remain inaccessible to unauthorized entities.

  • This prevents man-in-the-middle (MITM) attacks, ensuring that only the legitimate owner can decrypt and sign transactions.

  🔹 SHA-256 – Transaction Integrity and Tamper-Proofing

  • Each transaction message is hashed using the SHA-256 algorithm, ensuring that data integrity is maintained during transmission.

  • This hashing process creates a unique fingerprint of each transaction, preventing modification or tampering.

  • SHA-256 is also used to generate hashed identifiers for users’ phone numbers, preserving privacy and anonymity while linking accounts securely.

  🔹 Base64 Encoding – SMS Compatibility

  • Because SMS is designed to transmit text-based messages, raw binary data from transactions must be converted into a readable format.

  • Base64 encoding transforms transaction data into an SMS-friendly format, preventing data loss or corruption during transmission.

  • This ensures that transactions remain accurate and readable, even over older or constrained cellular networks.

  🔹 ECDSA (Elliptic Curve Digital Signature Algorithm) – Transaction Authentication

  • The Elliptic Curve Digital Signature Algorithm (ECDSA), specifically secp256k1, is used to sign transactions.

  • ECDSA ensures that every transaction is authenticated and non-repudiable, meaning once a transaction is signed, it cannot be altered or forged.

  • This standard is the backbone of Ethereum's cryptographic security, ensuring seamless integration with blockchain networks.

  🔹 AES-256 Encryption – Local Data Security

  • Private keys, transaction history, and sensitive user data stored on local devices or backup systems are protected with AES-256 encryption.

  • AES-256, a military-grade encryption standard, ensures that even if a device is compromised, data remains unreadable without the correct decryption key.

  • This adds an extra security layer for users who store wallet backups on their mobile phones or external storage devices.

Blockchain Integration :

🔹SMSChain will operate via a decentralized network of blockchain nodes.

🔹Each transaction submitted via SMS is relayed to Ethereum-enabled nodes using smart contracts designed to efficiently validate and process payments.

🔹We are already working on infrastructure optimized for Layer 2 solutions to reduce transaction costs and improve scalability.

🔹We will also potentially use lightweight nodes or APIs for transaction streaming.

SMS Gateway :

🔹 Integrates with services like Twilio for comprehensive SMS support.

🔹 Ensures the delivery of messages and the storage of your transactions in areas covered by GSM even at low intensity.

🔹 In the long term, we would like to be able to develop a protocol so that different users can serve as relays for faster sending of transaction requests.

Use Cases

The application will be available to everyone but the main objective remains the following :

• Rural Communities: Enabling financial inclusion for people without internet access.

• Crisis Scenarios: Performing or initiating financial transactions in the event of a disaster or conflict.

• Allow anyone to initiate a crypto transaction with their SMS without needing to be connected to the internet

Security Considerations

Private Key Security :

• Users are informed about secure storage practices for their private keys on the app.

• All transactions will are signed locally with a cryptographic signature (ECDSA on secp256k1, Ethereum standard) before being transmitted.

Data confidentiality :

• SMS content is encrypted by the application end-to-end to prevent interception up to the blockchain.

• A double verification system can subsequently be implemented for large transactions, requiring confirmation via OTP or a second factor of authentication.

• We want to use secure communication protocols (HTTPS/TLS 1.3) between the application and the relay servers.

Metadata minimization :

• no sensitive information will be stored on the relay server, and transaction logs will be automatically purged.

Interception attacks (MITM) :

• Impossible thanks to encryption and local signature.

We also think about the replication of relay servers:

• several relay nodes can be deployed to avoid a single point of failure (SPOF).

Conclusion

Our SMS-based cryptocurrency transaction system aims to bridge the digital divide by making blockchain payments accessible even without an internet connection.

By leveraging existing telecom infrastructure and integrating advanced crypto technologies, our solution guarantees security, speed and accessibility.

This protocol allows individuals and communities, even in the most isolated regions, to send and receive funds seamlessly, without the need for a complex application.

With robust cryptographic verification, interoperability with blockchain networks and a simplified interface via SMS, our system promotes global financial inclusion.

With this approach, SMSChain establishes itself as a bridge between traditional finance and the Web3 revolution, democratizing access to digital assets and strengthening the financial sovereignty of users everywhere.

Call to Action

We invite developers, investors and organizations to collaborate on this initiative. Together we can build a decentralized and inclusive financial future for all.

Last modification on 02/10/2025

White Paper likely to be improved soon