Sango’s innovative second layer (L2) bitcoin (BTC) solution is the foundation of the Central African Republic’s new digital currency system, representing an important step forward for the evolution of digital currencies worldwide.
“Bitcoin L2” is just fancy crypto terminology for the second layer built on top of the BTC blockchain. The Sango blockchain is the second layer. It is essentially a sidechain that takes advantage of all the advantages of Bitcoin and succeeds when the latter is lacking. Sango fully interacts with the entire Bitcoin network and transactions from Sango Coin (SANGO) to BTC are made through a two-way match between the Bitcoin mainchain and the Sango sidechain. Sango therefore represents the ideal trustless system suitable for a nation-state, building new economic infrastructures with built-in transparency.
While the Lightning Network has the potential to be a leading Bitcoin Layer 2 solution, it currently supports a limited number of channels and lacks sufficient capacity for daily economic activity at scale.
Therefore, by establishing interoperability with Bitcoin, Sango enables financial inclusion for citizens of the Central African Republic. Two-way support will allow everyone to transact at low cost, with high capacity and fast confirmation times, while benefiting from electronic governance (e-Gov) solutions, privacy and built-in programmability.
How to achieve this exactly? Sango explains it in detail:
The Sango L2 solution aims to create a digital government infrastructure using blockchain technology. It also helps reduce congestion in the Bitcoin network, facilitating instant payments and cross-border fund transfers. Being a sidechain, Sango not only reduces the processing load on the main chain by distributing work to the second chain, but also improves scalability and provides privacy and programmability through smart contracts. All these elements together make it a great solution for a national digital infrastructure that will be able to power a new digital monetary system.
Sango Coins will be issued by a quorum of nodes controlled by the institutions of the Central African Republic, known as the Institutional Quorum, whose members are democratically elected, including the Presidency, the Ministers and the National Assembly. The consensus mechanism is based on Tendermint Core, but modified by a custom proof of convention (PoC).
Why not use only Bitcoin?
The Central African Republic cannot settle for bitcoin because it cannot adequately meet all its needs. Although many people want to see the Central African Republic completely dependent on bitcoin, this could not be possible with the current technology.
Some features need to be specifically designed to meet the needs and infrastructure needs of the government, but government involvement is the factor that could enable widespread adoption. A technical solution like Sango, which enhances the Bitcoin blockchain, is the perfect way to ensure the financial inclusion of the African population in the global payments ecosystem while driving bitcoin adoption.
In addition to bitcoin, Sango also uses smart contracts to improve its utility. A robust infrastructure is put in place, allowing for new use cases specific to widespread use across the country.
Layer 2 solutions clearly have the potential to revolutionize the blockchain landscape, and Sango is Bitcoin’s first Layer 2 solution for e-Gov.
Sango: Africa’s Blockchain
Sango is able to summarize some of the most important advantages of this type of technology in Africa and explain them in simple terms:
Increase transparency of key government activities: By building government infrastructure on blockchain, transparency is achieved.
The unbanked: The Central African Republic, like much of Africa, has a population that has little or no access to financial services, including the most basic ones. Sango will establish mobile financial services.
Connecting the Central African Republic and Africa to the world: By establishing a two-way pair with bitcoin, Sango allows its users to connect to the entire world through bitcoin.
Marking natural resources: Access to capital by marking natural resources, because Africa is so rich, is one of the most important aspects. The Central African Republic is a leader in marking natural resources.
Building other digital currencies on top of Sango: Central bank digital currencies and stable conflicts are already a big deal for Africa, and the Sango blockchain could be the blockchain to accommodate them. The Central African State Bank plans to launch a common digital currency for the CFA franc, and Sango could be the blockchain used, ensuring global financial inclusion through bitcoin.
Sango embodies the Central African Republic’s vision of a digital future for itself and all of Africa. The Central African backbone project, due to be completed in the fourth quarter of 2022 and providing high-speed internet coverage to the entire country, as well as the “Young People” initiative, which distributes smartphones to the country’s young people, will have lasting impact on the lives of citizens and will change the future of the entire African continent.