The Forgotten Code

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The modern internet is about to be realized.

That’s because some forgotten code written about three decades ago is starting to resurface.

That code could now help us revolutionize online payments.

No more paywall screens, pulling out your credit card, or exceeding a minimum dollar amount on your purchase.

Developers are dusting off this code from the 1990s thanks to AI agents. AI assistants are taking care of many of the things we do each day.

Payments are about to be one of them.

But to understand just how impactful this code will be, we need to take a quick walk down memory lane.

402

It’s called HTTP 402.

That might sound a little familiar. You’ve likely encountered HTTP 404 when navigating the internet.

Source: Udacity

404 is a status code that tells a user’s browser that a link might be broken or a page is not found.

It tells us and the browser that something is broken.

But that’s just one status code of the nearly 100 that are commonly used. And most are status codes that things are going well; we just don’t see them often.

Take, for instance, HTTP 200. This code relays to your browser that everything on your page has loaded successfully. You won’t see this displayed on the page, only in the developer tools (go ahead and press F12 on your keyboard and search “HTTP 200” to see for yourself!).

Here’s what it looks like in your browser.

These status codes are essential for how we use the internet. They were formally introduced back when browsers were entering the limelight.

And some of these early HTTP codes give us a glimpse into what the creators imagined the internet would look like.

That brings us to 402.

HTTP 402 was tagged for a future use case tied to some sort of digital cash or micropayment solution.

The problem was, there was no digital cash. Websites needed a source of revenue. But it made no economic sense to charge a few pennies for people to access a webpage. After all, credit card providers would often charge too much, and settlement costs just made it infeasible.

In fact, that’s one reason advertising revenue became the dominant monetization method… Companies simply couldn’t enable micropayments.

It’s part of why HTTP 402 started to become forgotten code.

Instead, we ended up with a bolt-on solution for online payments that required us to fill out order forms, create a login, and input our credit card information.

It was never ideal.

And this might make you wonder what Meta, Google, and others would have looked like if 402 had been adopted early on.

But we no longer need to leave it to our imaginations… because 402 is finally arriving on stage in large part thanks to AI agents and stablecoins.

XX

x402

AI agents are coming to life.

These agents can help us respond to emails, take notes in our meetings, find flights, and summarize documents in seconds.

They are replacing time-consuming tasks with automation.

But to gain true agency to complete tasks without human oversight, AI agents still require payment solutions.

Up till now, the ability to book a flight still meant handing over credit card details.

This is why an open-source project created by the team at Coinbase is garnering so much attention in the developer community.

It’s called x402, and it’s built via HTTP 402.

The easiest way to think of x402 is to imagine that an AI agent needed to access a proprietary data set to make a decision.

This might be trade data, consumer reports, or anything that has a paywall attached to it. The agent can navigate to whatever page, but then it gets hit with an HTTP 402 status code.

Payment is required.

Now that’s all changing. The agent, using x402, can make a payment to tap into whatever data it’s trying to access. And it happens without the user needing to create an account, enter payment information, or sign up for a monthly subscription.

It’s a seamless flow.

The interesting part here is that x402 can handle micropayments, does instant settlements, has no fees, and is secure.

That’s because it leverages public blockchains and stablecoins.

So now stablecoins are enabling the work that developers did nearly 30 years ago to make this micropayment solution available.

This type of solution unlocks a wave of possibilities not just for you and me but for businesses and the internet at large.

The easiest way to think of this is with an LLM chatbot like ChatGPT or Claude. We can ask them to find a flight from our nearby airport to LaGuardia and to book the flight in seconds – without handing over sensitive information.

This development creates a frictionless flow for agents. And it brings us one step closer to the Web3 agentic economy we’ve been touching on here at Brownstone Research.

When it comes to the digital asset space, we can see projects already beginning to use x402. It’s not some futuristic solution that may come one day.

It’s already here and being put to use.

And it will transform how we use the internet.

Your Pulse on Crypto,

Ben Lilly
Senior Crypto Analyst, The Bleeding Edge