The Application of Cryptocurrencies in Non-Fungible Tokens

Abstract

This paper explores the application of cryptocurrencies in Non-Fungible Tokens (NFTs). After introducing the concepts and historical background of NFTs and cryptocurrencies, the paper analyzes the advantages of using cryptocurrencies in NFTs, including decentralization, security, stable storage value, cross-border payment, low transaction cost, anonymity, programmability, and community support. However, the paper also highlights the shortcomings of this application, such as unclear laws and regulations, price fluctuations, environmental problems, technical obstacles, security risks, intellectual copyright issues, and moral and social issues. To address these challenges, the paper proposes several workarounds, such as using stablecoins to solve volatility problems, providing user-friendly interfaces and educational resources to solve complex problems, and increasing the number of merchants and service providers accepting cryptocurrencies as payment methods to solve the problem of a limitation. Finally, the paper analyzes the industry trend and its potential future direction. This paper contributes to a better understanding of the potential of cryptocurrencies in NFTs and provides insights into the development of this emerging field.