For over 30 years, the internet’s original architects set aside a status code—HTTP 402—for use in digital payments. It was an imaginative allocation that never got any traction, largely because the financial technology needed to make it work simply didn’t exist. Fast forward to 2025, and Coinbase is resurrecting the dormant standard with x402, a “crypto-native” payments protocol that’s supposed to allow for instant, automatic transactions across the web. x402 signifies a big shift from the web payment systems of today. Those systems depend on platforms. Visa, Stripe, and PayPal are among the platforms we use to make payments on the web. They are not the only platforms we use; in fact, we use many centralized platforms to make payments on the web. x402 is not a centralized platform. It does not attempt to replace our centralized platforms with just another platform. To these ends, x402 is also something else: it is largely payment-agnostic. A Protocol for the Internet of Value At its heart, x402 allows websites, APIs, and applications to directly ask for and receive payments in cryptocurrency through the HTTP protocol. It’s not necessary to use plugins, middleware, or third-party integrations. Now, you can have direct interactions through simple web requests with stablecoins like USDC. x402 fufills a vision of web architecture that is decentralized, open, and extensible. The modern internet is about lightning-fast communications and interactions among people, devices, and systems. Three are the demands that need to be met: 1. Costs of transaction must be near zero. 2. The speed of finality must be in the neighborhood of 200 milliseconds (a little faster, a little slower, take my word for it, and I’m the one saying this). 3. The throughput must scale beyond 100,000 transactions per second (you have to love those peak moments when a lot is going on all at once). x402 takes care of business on meeting those demands. 1/ The internet reserved HTTP 402 for payments over 30 years ago, then forgot about it. Now, @coinbase is reviving it with x402, a protocol that lets websites and APIs accept crypto payments (like USDC) natively over HTTP. pic.twitter.com/S32a2ri7wI — Blockworks Research (@blockworksres) May 29, 2025 This method makes way for a new manner of online interaction: independent transactions between machines. It may soon be possible for AI agents, for instance, to pay for access to APIs in real-time and without human intervention. Or for a smart contract to pay an invoice at the moment the service it governs is rendered. Or for some app coordinating cloud resources to pay in microtransactions. But these aren’t magic uses to which x402 can be put, because it reimagines payments themselves as an internet-native primitive. Traditional Giants Are Fighting Back Although x402 presents a radically open method for handling digital payments, the traditional giants of the payment industry are not lying low. They are, of course, trying to remain relevant in a swiftly changing landscape. For example, this past week, Visa introduced artificial intelligence agents for link to its payment network. And as for Stripe, it claims to have adopted AI for front-line fraud detection and prevention. It too is trying to process an evidently crypto-involved future and has issued stablecoin-related communications that sound a lot like PayPal’s. Why? Because PayPal has, for some time now, been issuing rewards for the holders of its stablecoin, PYUSD. Even though these developments represent a change in direction, traditional platforms still are, at their cores, closed systems. They are platform-first, built on central control, proprietary infrastructure, and human-centric workflows. x402, in contrast, offers an open, permissionless protocol that can be embedded directly into the logic of apps, APIs, and services. Indeed, it can even be embedded into the apps of traditional platforms. Throughout this book, we will argue that using an open, permissionless protocol—whether it be x402 or any number of other such protocols—always results in better, app-centered, user-focused outcomes. This rising rift mirrors the wider digital economy—between old institutions making piecemeal changes and new protocols attempting to rethink the web from the bottom up. The Promise and Risks of Agentic Payments As AI technology grows and takes on more responsibilities, the concept of agentic payments—transactions started and completed by AI agents or applications—shifts from being a speculative concept to a practical occurrence. x402 is designed for this scenario, where machines are not only reading and writing data but also directly exchanging value over the web. The significance of these implications is hard to overstate. They suggest that AI agents could eventually take over some pretty meaty tasks currently performed by humans—tasks like managing subscriptions to digital services, purchasing those services, allocating resources among the many cloud platforms that exist today, and even negotiating and settling the contracts that bind all those services together. However, the freedom this technology promises is not without risks. It raises big questions about key custody, authorization, and abuse mitigation. If an AI agent makes an unauthorized payment, for instance, or if malicious bots exploit machine-native payment systems, who is responsible? This is something the developers and regulators of the technology will have to address—preferably before something goes badly wrong. Even with these obstacles, x402’s momentum indicates that a new kind of Internet economy, where web-native payments intermingle with data and content, is emerging. The fact that Coinbase raised the 402’s profile may say more about the economy’s potential than just that it was an endeavor to, as one might say, Web 2.0, raise the profile of an unfashionable number. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
