"The Cognitive Revolution" | AI Builders, Researchers, and Live Player Analysis 402 Payment Required: a New Way for AI Agents to Pay, with Nemil Dalal, Dev Platform Lead @ Coinbase
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Jun 28, 2025 
Nemil Dalal, Developer Platform Lead at Coinbase and co-creator of the X402 protocol, dives into the revolutionary potential of cryptocurrency payments for AI agents. He explains how the dormant HTTP 402 status code is being repurposed for digital transactions, paving the way for AI economic participation. The discussion also covers stablecoin dynamics, security measures like multi-signature wallets, and the vision of AI agents autonomously managing funds. Dalal addresses the need for reputation systems and how this technology might disrupt traditional advertising models.
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Stablecoins Bridge Crypto and Fiat
- Stablecoins combine the benefits of blockchain with fiat currency stability by backing tokens one-to-one with fiat reserves.
- This enables fast, global, low-cost transactions unlike traditional volatile cryptocurrencies.
Market Makers Power Stablecoins
- Market makers and cash in/cash out points bear currency and compliance risks in stablecoin transactions.
- Yield from treasury or bank deposits supports stablecoin economics, allowing low or no fees for end users.
Blockchain Fees Have Plummeted
- Blockchain transaction fees have dramatically decreased due to layer two scaling and increased block capacity.
- This allows micropayments to be economically feasible, overcoming an earlier barrier to crypto adoption.