NFTs: What Designers Need to Know

May 6, 2022NFT

You’ve probably heard about Twitter founder Jack Dorsey’s first Tweet selling for a mind-blowing $2.9 million to Crypto entrepreneur Sina Estavi. While the debate over the real value of the Tweet was settled just last week – it sold for just $280 at auction – the initial sale sparked further public interest in nonfungible tokens or NFTs.

Regardless of the cultural buzz surrounding NFTs over the last few years, few people have heard of NFTs or have a basic understanding of how they work.

Enter the World of Blockchain

To understand NFTs, you need to know blockchain and cryptocurrency. NFTs only exist in the blockchain world where bitcoin or other cryptocurrencies are maintained across a peer-to-peer computer network.

While blockchain is a highly sophisticated and complex system, the concept is simpler than you think.

A blockchain is a shared database where financial transactions take place.
The transactions are in the form of digital money called cryptocurrency.
The transactions are stored in blocks similar to file folders on your computer.
The folders or blocks are public and available to everyone in the system.
You can add transactions and information to the database but cannot remove or edit the
Seamly Systems | Fashion Design Software | What Are NFTs
This simplistic explanation does not explain how transactions are made or how you get into the blockchain system. However, that’s a rabbit hole for another time. Right now, you simply need to know what blockchain is to understand NFTs better.

What are NFTs?

A nonfungible token is a digital asset that represents a physical object. To fully understand this concept, let’s break down the term.


What does fungible mean? A fungible item is an item that can replace or be replaced by an identical item. It is an apple for an apple. A dollar bill is a fungible item because you can exchange it for a dollar bill. A bitcoin is a fungible item because you can exchange a bitcoin for another bitcoin.

A nonfungible item is an item that cannot replace or be replaced by an identical item. A physical object may have unique qualities that keep it from being replaced by an identical item. For instance, you may purchase two 2018 computers at the same price from the same place at the same time. However, a year later, both computers may hold different values for various reasons – use, condition, upgrades, problems, etc. Therefore, they are not identical and cannot be replaced by other items.


In cryptocurrency, tokens are digital units of value stored in the blockchain system. Some tokens function as money, which means they are fungible or can be replaced by tokens of the same value or function. Examples of tokens in cryptocurrency are Dogecoin, Ether, and Bitcoin.

Other tokens are nonfungible and cannot be replaced by other tokens. Tokens represent physical objects, products, services, or assets. Examples of NFTs in blockchain include (keep in mind, these are digital tokens, not physical objects):

● Artwork
● Clothing in a limited-run fashion line
● In-game item
● Written essay
● Collectible items
● Domain name
● Event or concert ticket
● Access to a chat room or server

To summarize, a nonfungible token on a blockchain is a unique digital token that you cannot copy or replace. The token represents a physical object or access to a service, event, etc., that you may not have access to anywhere else.

Can I Replace, Copy, or Duplicate an NFT?

One of the reasons digital creators have turned to blockchain to sell digital assets is that they can’t be copied or duplicated (hence, the term, nonfungible) in the system. How is this possible? Answering this question is a bit complicated. In the digital market, ownership is viewed differently than in the physical world.

Let’s say you go to an auction and buy a guitar that Prince owned. You walk away with two items after the auction.

1. The guitar
2. A certificate of authenticity that the guitar was owned by Prince

This type of physical transaction gives you a feeling of ownership because you are holding the guitar in your hands.

Since NFTs are digital purchases, you need to account for the fact that you don’t own a physical item. Let’s go back to the Prince example.

Let’s say that someone takes a rare photo of Prince and wants to sell that photo online but doesn’t want to risk someone making digital copies of the photo and spreading it across the web.

The creator can sell an uncopyable digital asset linked to the digital file, which they can mark as the real copy. The owner walks away with one item:

1. The certificate of authenticity.

So, even if the digital photo of Prince was hacked and copied across the Internet, you still have the digital certificate of authenticity proving that you own the original copy.

Is It Possible to Own a Digital Token?

The NFT concept can be difficult for people to get their heads around because there is no physical ownership of the digital item. You can’t hold it in your hand – so how do you know you own it? Does a digital certificate of authenticity actually give you ownership? The answer is yes. There are several reasons.


Digital creators and owners can limit access to a digital asset.


There are numerous ways to verify the authenticity of an original digital asset because of coding.


There is nothing new about digital asset ownership.


The blockchain platform is more exclusive.


The transaction is directly between the owner and the buyer.

Seamly Systems | Fashion Design Software | What Are NFTs

Challenges with NFTs

Like any other digital technology, NFTs have yet to go through the fire for users to discover their real benefits or challenges. However, problems have already emerged, causing people to speculate about their viability or necessity in blockchain or anywhere else.

The most glaring issue is weighing the value of NFTs and why buyers would pay millions of dollars for a digital asset. They are by no means useful or tangible in the same way as physical objects. Does it come down to bragging rights for wealthy, bored people?

Proponents of NFTs would argue that in this way, NFTs are no different than physical items that people purchase as status symbols or collectibles. In other words, the value is in the eye of the beholder.

There are also lingering concerns about an NFT’s actual market or resale value, potential scams, whitelisting, and, of course, digital theft.

As NFTs become more popular, these are issues that both creators and consumers will have to iron out. In the meantime, don’t be surprised if the first Facebook post sells for millions of dollars in some digital auction that never took place in the real world.