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The tutorial demonstrates how to make a watermark, often used to prevent counterfeiting on banknotes. Watermarks are created by soaking paper in water, smoothing it out, and allowing the wood fibers to absorb the water. This technique creates a translucent image visible when the paper is held up to the light, such as the watermark of Captain Cook on a banknote. The watermark is named after water, as it is a key element in its creation.