X402 — an Open Protocol for Internet-Native Payments

It's entirely possible then that some options would be available, for example in SEPA, that offer instant and irreversible settlement at zero cost.

Want to read a paid message? Please upload your recent utility bill and confirm your identity with a video call. Sorry, you are not a US citizen with possession of the only subset of ID documents we support, reject.

Will take ages for that to become a browser extension, or embed. Too many parties make money off the current way. Similar to the health "care" ("insurance") in USA

The way that payments work through SEPA is that the merchant pulls the money from your account. Legally they require a "mandate" - this can be as little as a handwritten signature on a document.

Security is essentially provided by easy reversal and strong penalties for abuse.

It's also really hard to interface with. Afaik, I can't simply get an API token from my bank and send 2-cent transactions to pages I read if they'd publish the IBAN as part of an HTTP header or meta tag for example. Nor do I know that my bank would be happy about a thousand tiny transactions each month

https://github.com/bacen/pix-api

This depends on the implementation on the underlying network, but basically the spending signs an authorization for transfer, and the merchant either settles that onchain themselves or delegates to what is called a facilitator that settles on their behalf. On EVM chains for the exact payment scheme this leverages EIP-3009 signatures

Yes, assuming its the first time you've interacted with an API endpoint and don't have cached payment requirements.

>Is there a reason why you wouldn’t pay ahead of time? I just understand why you couldn’t buy a few dozen/hundred/thousand dollars worth of credits, and wait until it runs low.

This would require manually integrating each vendor, which is totally valid if your agent performs a lot of a single type of task, but we suspect over time there will be huge value in agents being able to dynamically select tools / apis they want to use to accomplish their tasks, and dynamically pay for what they use

Basically, this fancy "protocol", is just a HTTP middleware that throws a payment required error and returns a crypto address lol.

Maybe you want to buy the service that is priced the lowest at the moment. Example: providers of inference services could drop their prices if they are underutilized. You could then have your system check for the best price and purchase only what is needed at the best price.

Transactions confirm every 2 seconds on Base, and preconfirm even faster (every 200ms); there's no lag from a peer to peer payments perspective since they settle so quickly.

Through account abstraction and spend permissions, you also don't have to wait and authorize every single payment. It's a customizable from a developer perspective depending on how they want to build out their application.

Agreed. Which is why 5 years ago, I developed L402 (formerly known as LSAT) to fill this very gap:

  * https://github.com/lightninglabs/L402 (https://lightning-labs-2.gitbook.io/lsat)

  * https://lightning.engineering/posts/2020-03-30-lsat/

L402 is more opinionated as utilizes the Lightning Network (LN) directly within the protocol. The server presents the client with a SHA 256 payment hash embedded within an LN invoice. The server requires the client to present the pre-image for said payment hash. The only way the client can obtain said pre-image is by paying the invoice on the Lightning Network (all payments are conditional payments where a pre-image needs to be revealed to complete a payment).

L402 also adds a layer of macaroons, enabling the protocol handle both payment and fine-grained authentication.

The advantages of LN over something like Coinbase's Base chain include:

  * Privacy: Coinbase and the entire world sees all your transactions. 

  * Decentralization & Reliability: Base is a singleton instance, if it goes down, you can't make any transactions. LN is decentralized, just like the internet, you can always route around failures. 
 
  * Settlement Speed: Base blocks happen every 2 seconds, until that period your transaction isn't finalized. However that's only committing to Base, and not the underlying ETH chain, which has 12 second block time. Latency on LN is primarily a function of e2e network delay, so it can be as little as 100 ms.

These days many transaction types onchain are completely free and subsidized because gas costs are subcent[1].

x402 functions predominantly on L2 networks like Base, where individual tx costs between agents are generally not a factor.

[1] https://www.gasfees.io/

Obligatory self promotion https://www.youtube.com/watch?v=8hHG8gOkZBE & https://github.com/SerJaimeLannister/randomnano & just because I am lazy and I had never written what this software is except in one comment on HN which I am also going to link lol which is going to be best that I can sum it up with https://news.ycombinator.com/item?id=44700680

Which loops through a lot of transactions with a custom nano vanity id generator to embed data into blockchain which would have 0 gas fees.

Want to do something with it one day but not sure how to, or even if its worth it given the decentralized nature and Like, I want to really play with it once I can secure myself a college and then a job & maybe I will do it in my side project.

Not necessarily. Crypto wallet can authorize expense just by signing something and sending that signature. No blockchain transaction takes place. Then these signatures are batched.

we can get decentralized systems to sub 0.0000000000001 cent fees. Fee volatility Wille xist but thats a prerequisite for openness.

Given that this is Coinbase sponsored I'm not sure this will be even available to the people of the world despite being on blockchain.

> AP2 is designed as a universal protocol, providing security and trust for a variety of payments like stablecoins and cryptocurrencies. To accelerate support for the web3 ecosystem, in collaboration with Coinbase, Ethereum Foundation, MetaMask and other leading organizations, we have extended the core constructs of AP2 and launched the A2A x402 extension, a production-ready solution for agent-based crypto payments. Extensions like these will help shape the evolution of cryptocurrency integrations within the core AP2 protocol.

[0] https://cloud.google.com/blog/products/ai-machine-learning/a...

Practically speaking yes.

As far as addresses, yeah there's no way to avoid this. When you send cryptocurrency there's no real way to ensure that a wallet exists at the receiver's address nor that the person you want to reach is at this address, so you need to be careful that you are using the correct address. Ethereum uses ENS addresses to help deal with this.

In that way this is a lot like a wire transfer in the US. If you use the wrong account or routing number then you're basically SOL. There's some verification you can do with receiver names but if your recipient is just at some bank and only the bank name comes up there's not much you can do.

You give a crypto wallet to an AI agent, and make sure it has some USDC.

> What's the point of I need a bunch of other coins and it's so complicated?

The point is that the CDP team built something that fits one of Coinbase's narratives du jour — agentic payments. It's simply a protocol for agentic payments. The team that built it doesn't even really know how it _should_ work or what the actual use cases are — but wouldn't it be cool if your AI agent had a crypto wallet, and instead of the agent getting pay-walled, they could just pay for stuff?

> This complexity and required tinkering seems like the kind of thing cryptocurrency nerds love, but is too complicated for someone just trying to make a payment.

I think that's a fair criticism. The Bridge/Privy/Stripe approach is wildly different, and focuses more on current problems.

No one needs that. Not a single party to the transaction, however remote or secondary. Every participant absolutely hates those.

All of which doesn't matter, because the whole KYC/AML bullshit is forced on us and it is inevitable in the TradFi world.