I made a demo of the new X402 payment technology. This is an initiative by Coinbase. Back in the early 2000s, there was a status code on the internet called 402 that meant payment required. It just never really got used because payments always proved difficult. There were also a bunch of businesses that never came into being, a lot of businesses that got pitched but never got realized that were based around micro-payments. But micro-payments proved difficult to do. It was very difficult to get the 30 cent payment processor fees out of credit card transactions, and so the status code went unused and those business models didn't get funded.

And that brings us to the current day, but now micro-payments might be back because Coinbase has brought us this standard. It basically requires that you modify an ERC20 smart contract to have this EIP3009 standard which implements the with authorization functions that allow a user to sign a transaction, and then the server can actually execute the transaction in flight confirm that it happened, and then give the access user they give the user access to content. Interesting thing about this is they can also be done machine-to-machine, and it can skip the need for API keys. If you think about what an API key is, a lot of times it's an identifier and a proxy for a Proof of payment or a up-to-date membership. But with more and more machine-to-machine communication and AI agents operating on the internet, these new ways to move value will become more and more valuable and will make things more efficient in real time. It's going to create totally different economic strategies on the internet which is really exciting.

Anyways, I wanted to see how it worked, so I put together a demo. I actually wanted to implement it, so in this project I used the I Created a smart contract launched on Base, and then I made like a server, an Express server that I deployed with Versal that implements it. So you can go ahead to the website, and you can try it out yourself. It's pretty awesome.