We are moving towards an economic system in which software and devices transact with each other without human involvement.
Instead of just executing transactions, machines will be able to make decisions, coordinate with each other, and purchase whatever they need in real time. Sensors and satellites will sell data streams down to the second. Factories will price their electricity purchases in real time based on supply and demand. Supply chains could even become completely autonomous: reordering materials, booking transportation, paying customs fees, and rerouting shipments without any human intervention.
But such an economy cannot be built on large, infrequent payments. It must operate on billions of small, continuous transactions, executed autonomously at machine speed. Just as electricity pricing enabled mass production, microtransactions and machine-to-machine (M2M) payments will make full automation economically viable.
And if seamless M2M payments are the new electricity, then blockchains – the rails on which these microtransactions will take place – should be considered the new electricity grid. It is a critical piece of infrastructure that paves the way for new business models, new technologies, and ultimately this new machine economy.
How will these innovations develop? The electric revolution has many lessons to teach.
A new revolution
Before electrification, electricity was local, manual, inconsistent and expensive. Factories relied on steam engines or water wheels, which limited where production could take place and how it could expand. Power was something that was built into every operation.
Electricity has changed the situation. Once electricity became standardized and always available, it ceased to be a functionality and became the substrate of modern industry.
Payments today still resemble the pre-electric age. They are episodic, generally processed in batches and heavily publicized by humans and institutions. Even digital payments involve discrete events such as invoices, settlements, reconciliations or billing cycles.
But M2M payments (autonomous financial transactions between connected devices), when combined with micro-transactions (worth pennies), transform value exchange into something ambient and infrastructure-like. Instead of stopping to pay, machines can simply operate continuously, exchanging value as they consume resources or provide services.
Technology leaders have been discussing microtransactions since the early days of the Internet, but it was impossible to realize this vision with today’s banking system. Now, blockchain technology makes it possible to send value across the world instantly and almost for free. The infrastructure of the crypto industry is fundamental to the birth of seamless M2M payments.
And just as electricity enabled the creation of computers and the Internet, M2M payments and microtransactions will enable an entirely new economy to thrive.
How electricity changed the world
The continuous power provided by electricity enabled automation. Mass production occurred not because factories hired more workers, but because machines could operate consistently and relatively independently.
Today’s machines are technically autonomous but economically constrained. An AI agent can make decisions, route traffic, or optimize logistics, but it can’t pay for on-the-fly computing. Economic frictions force human intervention into otherwise independent systems. But M2M payments, combined with microtransactions, will provide continuous economic power, in the same way that electricity provides continuous mechanical power.
Additionally, electricity gave rise to industries that simply could not exist before it. M2M payments will have the same property, providing economical infrastructure to industries that cannot operate without accurate, real-time payments.
What does it look like? We could have autonomous supply chains, in which machines constantly coordinate purchasing and logistics. We may also see the emergence of AI services with pricing models that reflect milliseconds of inference time. Global data markets could depend on pay-per-byte access. The infrastructure itself – from roads to charging stations – could price access continuously and automatically.
It is worth noting that the shift to usage-based pricing has also transformed electricity business models. Paying per kilowatt hour has allowed businesses to scale without renegotiating contracts or investing in fixed capacity. You paid for what you used when you used it. M2M payments will provide the same flexibility to 21st century businesses.
Lessons from the electric revolution
In the early days of electrification, the main focus was on the development of generators. But this is not the most important technological innovation. What mattered was the transmission. Only when electricity could be distributed everywhere, cheaply and predictably, did it reshape industry and society.
The same lesson applies to M2M payments. The blockchain rails on which payments will be made matter much more than the specific M2M payment application (like Coinbase’s x402 protocol) used. The priority should therefore be to build the best possible blockchains: chains with near-zero fees, very low latency and predictable performance. In other words, M2M payments face the same frictions as regular stablecoin payments: they need the underlying infrastructure to be top-notch if they are to function properly.
Additionally, blockchains used for automatic payments should be seen as neutral infrastructure. They must be interoperable across vendors, jurisdictions and machines. After all, machines can no more negotiate tailored payment systems than household appliances can negotiate voltage standards. This means that decentralization can play an important role in the growth of the machine economy. In this case, public blockchains could have an advantage over private alternatives.
If M2M payment rails achieve this neutrality, they become the coordination layer of autonomous systems, just as electricity is the coordination layer of physical energy. At this point, innovation can safely move toward the creation of entirely new, machine-driven industries.
The machine economy will arrive when machines gain the ability to transact continuously, autonomously and invisibly through the power of blockchain. M2M payments are not just a feature of this future. They are its electricity.
