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A ferrofluid is a liquid which contains incredibly small pieces of a magnetic substance. Common metals used are cobalt, magnetite and iron. It is important that these pieces of metal be small enough that they remain in a liquid state when exposed to a magnet. This threshold is somewhere on the order of ten nanometers.
When many people use the term ferrofluid, they are also referring to magnetorheological fluid, a fluid similar in all ways to a ferrofluid, except that the size of the particles is larger. This difference in size means that the fluid becomes solid when exposed to a magnetic field, then reverts to a fluid when the magnetic field is removed.
The particles in a ferrofluid may be suspended in one of many different substances. The most common fluids used are water and oil. Added to this basic fluid is some sort of surfactant to make the fluid more stable.
One of the most important military applications of a ferrofluid was in the late 1980s as a form of radar-repulsion. Painted with a ferrofluid and non-magnetic paints, airplanes are able to absorb radar waves and remain invisible to radar when they pass overhead.
A number of exciting projects are also underway utilizing both ferrofluid and magnetorheological fluid. One of these looks at creating light-weight, very flexible clothing which can be transformed into heavy-duty body armor in less than one-hundredth of a second by generating an electromagnetic field to transform the fluids into a solid state. Ferrofluid is also used as a method of cancer detection, in speakers and hard-drives, and for sealing a wide range of devices.
Ferrofluid is capable of operating in extreme temperatures, ranging from -55°C to 200°C (-67°F to 392°F), making them ideal for any location on Earth and particularly suited to space conditions. Since the fluid and particulate matter used can be varied fairly widely, most properties of a ferrofluid can be modified. Conductivity, viscosity and volatility can all be affected to a wide degree, allowing science and industry to customize ferrofluids to meet specific needs.