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The tutorial explains how watermarks on banknotes are made using a watermark on a piece of white paper. The watermark is formed by soaking the paper in water, spreading it out to remove wrinkles, and allowing the wood fibers to absorb the water. This process creates a hidden image visible when the paper is held up to light. The name "watermark" comes from the use of water in the production process. It is not allowed to demonstrate making these watermarks on actual banknotes due to copyright issues.
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