Non-fungible token

In March 2021 the digital artist known as Beeple, real name Mike Winkelmann, sold one of his works (Everyday: The First 5000 Days) for a whopping $69 million at the famous Christie's auction house, making it the third most expensive by a living artist. Until recently, in the digital world one copy was indistinguishable from another, which reduced its value, but the emergence of blockchain and non-fungible tokens (NFTs) has changed that, making it possible to buy digital works considered originals.

What is a non-fungible token?

A non-fungible token (NFT) is a cryptographic asset that has the capacity to be unique and one-of-a-kind. Blockchain technology stores the properties of this type of token, thereby making it possible to certify both the asset's originality and its ownership. A smart contract makes this possible and also enables the asset to be traded. 

In other words, in practice an NFT serves to monetise digital content by allowing files to be "collectibles" and have a single owner. Currently, companies use it as an added value, selling tickets in this way to prevent resale, offering exclusive access to communities among other things.  

The idea for NFTs, aka nifties, emerged alongside blockchain technology in 2014, but did not become popular until the emergence of the Ethereum cryptocurrency, which included a system for the creation and storage of non-fungible tokens.

Fungibility

What does non-fungible mean? Imagine you have a one-euro coin and you exchange it for another one-euro coin. It doesn't matter because they all have the same value, i.e. they are fungible. The same is true if you have bought a digital token, for example a bitcoin. The difference with non-fungible tokens is that they are unique and smart contracts allow you to identify them as such.

NFT: certificate of ownership vs digital object

A non-fungible token can function in two different ways: as a certificate of ownership and as a digital object. As a certificate, the NFT is not the work or the asset itself, but the blockchain record proving that a person is the owner of a copy or a specific asset; that is why its main value lies in authenticity, traceability and the transfer of that ownership. 

On the other hand, as a digital object it is used more to represent, sell or collect unique content, such as an image, a song, a ticket or a virtual item. In this case, what is acquired is the token and the associated rights or conditions, but not the intellectual property of the work, which may remain with the creator. 

How do non-fungible tokens work?

NFTs have four main characteristics: they are unique, indivisible, transferable and capable of proving their scarcity. One of the keys to certifying these characteristics and facilitating the interoperability of these assets across multiple platforms are the various existing standards, the most widely used being Ethereum's ERC-721, ERC-1155, and the most recent, ERC-8004, a standard that can serve as a basis for AI agents to have their own digital identities and participate in the creation or ownership of assets, based on developers' creations. 

To create an NFT, simply use platforms such as OpenSea or Mintable, where the artist uploads the digital file and creates a smart contract associated with it. NFTs are listed on these platforms and can be accessed by potential buyers. To buy an NFT it is necessary to have an account with cryptocurrencies, specifically Ethereum, from where a transfer is made to the creator and in exchange the property is transferred.

NFT: Wallets

If we buy an NFT, which is virtual, where do we store it? For that, we need wallets, i.e. digital wallets that help us to store and even trade them. The same applies to cryptocurrencies, such as bitcoin, which are stored on the Internet through these applications. The best known and most widely used are the following: Metamask, Enjin, Math Wallet, Trust Wallet or Alpha Wallet.

NFTs and art

NFTs are having a tremendous impact on the art world, as exemplified by Beeple's million-dollar artwork mentioned at the beginning. Non-fungible tokens have opened up new possibilities for digital art, which can now be considered as part of a collection, as an investment or as a commodity to be traded as its originality and value are assured. It has also enabled digital artists to sell their images, animations or videos by connecting directly with collectors, thereby increasing the income from their work.

Advantages and disadvantages of non-fungible tokens 

The main advantage of NFTs is their reliability. Blockchain technology allows the full provenance of the work and copyright details to be known, with the potential to include additional information that will always be part of the code and therefore inseparable from the work. This prevents counterfeiting and theft of works, and allows artists to be compensated more securely.

The disadvantages relate mainly to the fact that they are non-tangible assets. They are works of art that live in a computer network and, in essence, cannot be considered as an object in their own right. In addition, there is growing concern about the amount of energy consumed in processing digital assets, if it does not come from renewable sources, and the impact may have on climate change.

Risks and myths surrounding NFTs

There are a number of myths surrounding the trading of NFTs. The first is the belief that purchasing a token is equivalent to also purchasing the artwork or its intellectual property rights. In reality, ownership of the NFT and the IP of the content are two distinct matters; the NFT serves to prove ownership of the token but does not automatically transfer copyright, trademarks or commercial exploitation rights. 

On the other hand, there are also various risks we must consider. One of these is the volatility and speculation within the sector, as prices can rise or fall very rapidly. What’s more, the market remains prone to manipulation, counterfeits and fraudulent schemes such as fake marketplaces. Another aspect to bear in mind is malicious links and phishing, where the aim is to trick the user into signing deceptive transactions or connecting their wallet to cloned sites. 

Wallet custody is another critical issue. If a user loses their private key or access to their wallet, they will lose control of the NFT and any associated assets. Therefore, it is advisable to always verify the URL, be wary of unexpected downloads and links and use password security measures to reduce the risk of theft. 

Recent developments in the market for non-fungible tokens

In recent years the NFT market has established itself on a foundation of real utility, leaving behind the early years of popularity and speculation regarding its utility as a financial asset. In 2025, according to the 2026 Non-Fungible Token Market Report by the consultancy firm The Business Research Company, the sector closed the year with a market volume of $60.8 billion and is expected to grow to $347.5 billion by 2030.   

According to the same organisation, gaming NFTs, which have used this format to allow users to obtain collectable and personalised assets, lead the way in transaction volume with 38%, followed by the ticketing and events sector, as various companies use this market as an entry system, preventing fraud or duplicates. Consequently, non-fungible tokens have become a creative tool and an added value for enhancing the user experience. Companies such as Ticketmaster are already using NFTs for events and concerts.  

This tool has also given a major boost to the world of digital art as it has enabled artists to monetise their creations, producing unique works of art that can be owned, bought or sold just like physical art. Recently, AI has also been integrated into this field, giving rise to generative art – works of art created using AI algorithms and models, resulting in unique pieces that are difficult to replicate. 

Iberdrola and its innovative venture into NFTs 

As part of our commitment to innovation as a strategic priority at the Iberdrola Group, we use blockchain technology to verify our shareholders' attendance at the General Shareholders' Meeting, ensuring that every vote is secure, tamper-proof and confidential. This initiative, implemented for the first time at the 2022 Annual General Meeting, aims to ensure the traceability and immutability of the recorded data as well as promoting remote attendance in line with our commitment to sustainability.  

Thanks to this practice, once the information has been recorded, it cannot be modified and remains encrypted on the blockchain network, which reinforces the confidentiality of the process and provides a higher level of transparency and trust. 

The energy challenge of NFTs: sustainability 

NFTs have become part of the debate on environmental sustainability due to the blockchain technology infrastructure on which they are based. Their creation, purchase and sale processes require high electricity consumption and, consequently, contribute to an increased carbon footprint in the digital ecosystem. 

In the case of cryptocurrencies, an estimate by the US Energy Information Administration (EIA), published in 2024, revealed that the country's electricity consumption resulting from cryptocurrency mining ranged between 0.6% and 2.3% of the total, equivalent to the consumption of between three and six million households. Against this backdrop green cryptocurrencies have emerged. These are digital currencies that aim to reduce the carbon footprint in this sector because transactions require less electricity, thereby helping to combat the effects of climate change.  

Some green cryptocurrencies incentivise the use of renewable energy sources for their mining and validation processes, ensuring that validators who use clean energy, such as solar, wind or hydroelectric power, receive rewards.

NFTs and the digital transformation

NFTs emerged as an extension of blockchain technology applied to the ownership of a virtual asset, initially linked to digital art. During their boom in 2021 they achieved great speculative popularity, but the market quickly became saturated. In this early stage their value was more tied to scarcity and speculation than to actual utility.  

Currently, non-fungible tokens have entered a phase of technological maturity, integrating into the digital ecosystem beyond the realm of art. Today they are used as access credentials, digital tickets, assets in video games and digital identities. What’s more, current trends point towards dynamic NFTs, linked to physical experiences as a unique value proposition offered by companies.   

Looking ahead, expectations are focused on greater integration with artificial intelligence and the digital economy. According to the Gate Learn portal the trend suggests that NFTs will become a digital property infrastructure, enabling new forms of interaction, commerce and identity in the online world.