Is Cardano the Future of Cryptocurrency?

For years, a small crowd of technical thought leaders have talked about sprinkling tiny toll booths across the internet so content and data could be paid for in many little drips instead of through a few big monthly subscriptions. But the infrastructure to actually implement that idea never quite showed up.

Cardano (CRYPTO: ADA) might finally have something interesting to say about the issue. If it does -- and it's a pretty big "if" -- it would shore up the investment thesis for buying the coin substantially, and it might even make it into a project that could be part of the future of the entire crypto sector. Let's dive in and see what this chain might be getting up to.

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This bet could give AI agents a wallet and something to spend money on

First, we need to learn just a tidbit of technical background.

You're probably familiar with the notorious "404" error code that websites send when you're trying to visit a page that doesn't exist. There are actually a bunch of other status codes built into the web, and some of them, like the 402 code, aren't really in active use. The 402 status code is meant to signal that the user needs to submit a payment to view the page in question.

Recently, Coinbase Global introduced the x402 protocol as a payment standard, building on the old 402 code so web services can request and settle small crypto payments when a user attempts to access a paywalled webpage. In short, x402 is a common way for compatible wallets, services, and even AI agents to send invoices and settle payments at a very rapid pace, and all without the need to create a separate account or import payment information for each site. In other words, it's an attempt to give websites, users, and bots a standardized way to charge and pay each other in real time.

Cardano's angle is that it's building x402 support directly onto its chain in a bid to potentially be the transaction layer provider to anyone on the internet who wants to capture micropayments in exchange for pieces of content or data on their site. The Cardano integration theoretically lets AI agents pay for resources and services via APIs using Cardano's native coin and a Cardano-based stablecoin.

Now the question is whether developers will use the opportunity that Cardano has created via its platform to roll out x402 to the many websites that could benefit from it. If that ever happens, there could be a big increase in the demand for the coin, as holding some of it would be necessary to pass most (or potentially even all) x402 prompts.

Will this be the future of crypto?

Could being the owner of the x402 payments ecosystem make Cardano into a major cryptocurrency that significantly influences the rest of the crypto sector while making its investors richer along the way?

The honest answer is that it might, but only under a pretty demanding set of assumptions.

x402 is chain agnostic by design, and the protocol does not itself incur any fees for anyone involved. It's a standard that can be used across multiple networks, so it can process payments using different assets, including many different stablecoins, depending on what a given service accepts. Several other projects and infrastructure providers are already experimenting with x402 support too. That means Cardano is not the only toll booth being built.

Expecting x402 to rewrite how the internet pays for content is a stretch. But expecting Cardano to carve out niche use cases, especially around AI agents paying for data, is a bit more realistic, at least for the moment.

Nonetheless, x402 strengthens one leg of Cardano's investment thesis. Adding an early production-grade integration of a promising payment standard for AI agents gives the network a shot at participating in a new category of demand that many rivals have not yet targeted directly. However, that does not make Cardano the future of cryptocurrency.

Even if x402 thrives, there is a good chance that most payment volume will route through stablecoins and whatever chains are most convenient for large platforms, rather than through Cardano by default. Assuming that, Cardano still has meaningful upside if it can capture even a modest share of agent driven payment flows, but the path is narrow, and the risks of underwhelming adoption of x402 are unfortunately quite high.

So don't rush to buy Cardano on the basis of x402. But do keep a close eye on how it's approaching this opportunity, as it could signal that there's a lot of growth on the way if its plans are implemented well.

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.