HTTP status code 402, which signifies that 'payment is required', has remained dormant for over 25 years. However, Coinbase's new x402 protocol aims to activate this status, allowing seamless payments in stablecoins like USDC via standard HTTP. This initiative caters to the growing need for machine-to-machine transactions as AI systems become more prevalent. The x402 protocol enables automated payments directly through HTTP, enhancing the interaction between software agents and digital services without the traditional hurdles of human-centric payment systems. Transactions occur via two headers, X-PAYMENT and X-PAYMENT-RESPONSE, facilitating microtransactions and agentic payments crucial for a decentralized economy. Unlike existing platforms like Visa and PayPal, which are centralized and permissioned, x402 is open and permissionless, making it easier for developers to monetize APIs directly through the protocol. While challenges like security and regulatory scrutiny remain, the potential for a machine-to-machine economy signifies a transformative shift in how digital payments are processed.

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