We are moving towards an economic system where software and devices trade with each other without human involvement.
Instead of simply carrying out transactions, machines will be able to make decisions, coordinate with each other and buy what they need in real time. Sensors and satellites will sell data streams after another. Factories will price electricity purchases in real time based on supply and demand. Supply chains could even become completely autonomous – reordering materials, booking transport, paying customs fees and rerouting shipments without human involvement.
But such an economy cannot be built on large infrequent payments. It must run on billions of small, continuous transactions that are executed autonomously at machine speed. Just as electricity prices enabled mass production, microtransactions and machine-to-machine (M2M) payments will make full automation economically viable.
And if continuous M2M payments are the new electricity, then blockchains—the rails on which these microtransactions will take place—must be seen as the new power grid. They are a critical piece of infrastructure that unlocks new business models, new technologies and ultimately this new machine economy.
How will these innovations develop? The electrical revolution has plenty of lessons to learn.
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 scale. Power was something that was built into every operation.
Electricity changed that. As power became standardized and always available, it ceased to be a function and became the substrate of modern industry.
Payments today still resemble the pre-electric era of power. They are episodic, usually processed in batches and heavily mediated by people 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 microtransactions (worth a few cents), make value exchange something ambient and infrastructure-like. Rather than stopping to pay, machines can simply operate continuously, exchanging value while consuming resources or providing services.
Tech leaders have been discussing microtransactions since the early days of the Internet, but it was impossible to realize this vision with the current banking system. Now, blockchain technology makes it possible to send value around the world instantly and at almost no cost. The infrastructure of the crypto sector is fundamental to the birth of continuous M2M payments.
And just as electricity enabled the creation of computers and the Internet, M2M payments and microtransactions will allow a whole new economy to flourish.
How electricity changed the world
The continuous power provided by electricity enabled automation. Mass production did not happen because factories employed more workers, but because machines could run constantly and relatively independently.
Today’s machines are technically autonomous, but economically limited. An AI agent can make decisions, direct traffic or optimize logistics, but it cannot pay for computation on the fly. Economic friction forces human intervention into systems that are otherwise independent. But M2M payments combined with microtransactions will provide continuous economic power in the same way that electricity provides continuous mechanical power.
Also, electricity unlocked industries that simply could not exist before it. M2M payments will have the same characteristic that provides financial infrastructure for industries that cannot function without fine-grained real-time payments.
What does it look like? We could have autonomous supply chains where the machines continuously coordinate purchases and logistics. Or we could see the rise of AI services with pricing models that reflect millisecond completion times. Global data markets may depend on pay-per-byte access. The infrastructure itself – from roads to charging stations – could continuously and automatically price access.
It is worth noting that the shift to consumption-based pricing also transformed electricity business models. Paying per kilowatt-hour allowed companies to scale without renegotiating contracts or investing in fixed capacity. You paid for what you used when you used it. M2M payments will bring the same flexibility to 21st century businesses.
Lessons from the electrical revolution
At the beginning of electrification, the focus was mostly on developing generators. However, it was not the most important technological innovation. The decisive factor was the transmission. Only when electricity could be delivered everywhere, cheaply and predictably, did it reshape industry and society.
The same lesson applies to M2M payments. The blockchain rails on which the payments will take place matter much more than the specific M2M payment application (like Coinbase’s x402 protocol) used. The priority should therefore be to build the best blockchains possible – chains with almost zero fees, very low latency and predictable performance. In other words, M2M payments hit the same frictions as regular stablecoin payments: they need the underlying infrastructure to be tip-top if they want to function properly.
Furthermore, the blockchains used for machine payments must be considered as neutral infrastructure. They must be interoperable across vendors, jurisdictions and machines. After all, machines cannot negotiate customized payment systems any more than appliances can negotiate voltage standards. This means that decentralization can play an important role in the growth of the machine economy. In that case, public blockchains could have the advantage over private alternatives.
If M2M toll rails achieve this neutrality, they will become the coordination layer of autonomous systems, just as electricity is the coordination layer of physical power. At that point, innovation can probably shift to building entirely new machine-driven industries.
The machine economy comes when machines gain the ability to act continuously, autonomously and invisibly thanks to the power of blockchain. M2M payments are not only part of that future. They are its electricity.
