It is what is known as "resistance" soldering. There are two electrodes at the tip, with a voltage applied to them. When you touch both of them to a conductive material, a current will pass through what is basically a short circuit, and the material rapidly heats up. The tip only gets hot by picking up the heat from the material that heated, the tip itself having little mass, cools quickly.
Resistance soldering has been used for decades in industry, it has its place, but for general electronics use I don't find it a very usefull method.
If I really need cordless soldering, I would either get a rechargeable iron, or a butane powered one. The nice thing about the butane powered ones is that they have many tips available, and can also be used as a source of hot air for heat-shrink, reflowing solder, even SMT work.