What You Need To Know About x402 And How It Impacts Payments | Erik Reppel
episode
Talking Tokens: Crypto, Onchain Finance, Investing
29 min
1 speaker
6 chapters
transcribed 1 month ago
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Transcript generated automatically by AI and may contain errors.
Why is a native internet payment protocol needed now?
Computers talk to each other all the time. We call this the internet. As computers talk to each other, they can tell each other, like, hey, show data in this way, or hey, here's an image, or here's a piece of audio. But they have no way of saying, here's money. And so what X4D does is it allows you to code against money and treat money as something that you can share as easily as you could content.
Eric Rappel is the head of engineering at Coinbase Developer Platform and creator of X402. With X402, Rappel is building a protocol that lets computers pay each other as easily as they exchange data. As AI agents become economic actors, he argues they'll need a way to move money alongside wallets, budgets, and the ability to transact in real time.
What are you ultimately hoping people build with this? What I'm really excited about is new businesses. And so you kind of have this existential question in the age of AI of what is the business model of the future for publishers, for websites that people go to that are destinations? Because AI agents are quickly becoming kind of a dominant way people view content. That disintermediates publishers and API providers and people from their audience in a big way.
Today, I'm joined by Eric Reppel, the head of engineering at Coinbase Developer Platform and the creator of X402. We're going to get into how he thinks about AI at a foundational level, what Coinbase is building internally, and what X402 actually is. If you're confused, don't worry, we'll get into it. Eric, welcome on. Excited to be here. Excited to have you. Maybe at a high level, how did you even get into the AI space? Obviously, it's very cool and trendy now, but I'd imagine it was years prior.
Yeah, so I actually started my career as a machine learning engineer. And so I've been working on what we now call AI. Back then it was called machine learning since really university. Yeah, did a lot of early things with vision models and transformers in the pre-GPT era with like Bart and Bert and, you know, lots of more traditional machine learning techniques for natural language. And then my career has kind of always been split between crypto and AI. And yeah, so here we are. Nice. I just want to make sure the mic is because it's like falling out.
If I do a button up, it's Miami, so you got to go. Don't worry, we'll edit this out. I just don't want the audio to be bad. No, of course. Okay, cool. Awesome. So what was it about machine learning that then drove you to lead this initiative, maybe at ClinBase? Or was it something else?
I was with Coinbase from 2017 to 2021, and we were actually doing some really interesting stuff with AI at Coinbase. Even back in 2018, 2019, we were actually very early in running transformers, which are kind of the machine learning model that underpins LLMs in production for a variety of use cases within Coinbase. And so I worked on that back in the day and I left Coinbase in 2021 and was leading engineering at a company called Zora and then left Zora and took a year off in 2024 and got agent filled like everybody else and sort of like catch up on all the AI goodness I missed in three years at Zora. And it occurred to me like, okay, AI is going to become an economic actor. They're going to need to do payments. They're gonna need to be able to exchange value. Blockchains have actually gotten really good now. You actually can send the money like in under a second for under a cent on modern blockchains. It's kind of the natural rail. Like if you were gonna build a piece of financial infrastructure for AI, from first principles, you'd kind of end up at building a blockchain.
What is x402 and how does it let computers send money like they send data?
And I've been long aware of this problem of like, there's no internet native payment protocol. It's really not a new problem at all to go and solve. It traces its roots back to the 80s of people trying to build payments into the internet. But it really struck me as this is now probably the time to do it because of AI coming online and needing to be able to pay and blockchains finally being good enough that they move at the speed of the internet, not at the speed of 10-minute blocks. Yeah.
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Chapters
6 chapters
1
Why is a native internet payment protocol needed now?
0:00–3:49
2
What is x402 and how does it let computers send money like they send data?
3:49–7:05
3
How can x402 enable new business models for publishers and AI agents beyond ads and subscriptions?
7:05–11:19
4
Which companies are already using x402 and what are the biggest current use cases?
11:19–15:09
5
Why did Visa and Mastercard join the x402 Foundation and how will traditional cards work with the protocol?
15:09–18:30
6
What is the long‑term vision for x402 and how will it become invisible infrastructure for payments?
18:30–29:00
Speakers
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