x402: The Key to Internet Money, Micropayments & The AI Agent Economy | Sam Ragsdale

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Technology, Tech News, News

4.7 • 1.2K Ratings

🗓️ 5 November 2025

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

Micropayments were always meant to be part of the internet, but the technology never existed to make them work. Until now. David sits down with Sam Ragsdale, CEO of Merit Systems, to unpack x402, a new protocol reviving the long-dormant “Payment Required” status code to enable crypto-powered microtransactions across the web. They explore how x402 could transform how machines, AI agents, and humans pay for internet resources, reshape online business models beyond ads, and unlock a new economy of autonomous agents and programmable commerce. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🪙FRAXNET | MINT, REDEEM, EARN https://bankless.cc/fraxnet 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR L2 NETWORK https://bankless.cc/Mantle 💤EIGHT SLEEP | IMPROVE YOUR SLEEP https://bankless.cc/eight-sleep 💠BIT DIGITAL ($BTBT) | ETH TREASURY https://bankless.cc/bit-digital We’re being compensated by Bit Digital (NASDAQ BTBT) for this segment promoting their company and BTBT. The compensation is paid in cash as a one time payment. You can find additional information about Bit Digital and BTBT on their Investor page at https://bit-digital.com/investors ------ TIMESTAMPS 0:00 Intro 0:10 What is x402? 6:19 Internet Micropayments 9:45 x402 Encryption 12:10 x402 Inception 15:20 How x402 Transactions Work 27:02 x402 Experiments 39:46 Paywalls 43:53 A New Internet? 47:12 Call to Builders 49:21 Merit Systems 53:56 Resources 55:36 Closing & Disclaimers ------ RESOURCES Sam Ragsdale https://x.com/samrags_ Merit Systems https://www.merit.systems/ x402scan https://www.x402scan.com/ Coinbase x402 https://www.coinbase.com/en-pt/developer-platform/products/x402 Stratechery - The Agentic Web and Original Sin https://stratechery.com/2025/the-agentic-web-and-original-sin/ ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

Transcript

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0:00.0	Bankless Nation, I'm here with Sam Ragsdale from Merit System.
0:07.0	Sam, welcome to bankless.
0:08.8	Excited to be here.
0:10.1	X402 is the topic of DeJure on crypto Twitter.
0:14.7	People loosely know it as a payments protocol for AI agents,
0:19.0	but I think we need to go into a lot more detail here on the episode.
0:22.0	So maybe I will just start with the question, what is X402?
0:26.5	Yeah, so starting from the top, X402 is a protocol, more general than agents, for getting
0:31.6	access to API resources, in other words, off-chain servers via crypto payments.
0:37.7	I think it helps to go back to the beginning.
0:40.4	HCTP is the transport protocol for network packets on the internet.
0:45.9	And it was designed in concert with the browser by Tim Berners-Lee, Mark Andreessen,
0:50.1	and a bunch of other people that I'm not going to name drop right now in sort of the early 90s
0:55.0	while the browser was being created. The status codes 400 and 500 are sort of the error
1:01.1	status codes. The 200 ones are the success status codes. 4.02 is very low. It's very early on because
1:08.7	it was very important to them that they reserved that one for payment required.
1:13.2	It was very obvious to the people creating the internet
1:15.3	that the most obvious way that a server would give you resources
1:19.6	would be that you would pay directly for that resource.
1:23.0	Particularly in the 90s, when the status code was created,
1:28.9	servers were like three orders of magnitude more expensive than they are now. And so the question to the people creating the
1:33.4	internet, the first browser, was why would a server, why would you put a server online? And then why
	...

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