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The text explains how watermarks are used to prevent the replication of documents, such as banknotes. Watermarks are created by pressing wet paper fibers together, causing the paper to absorb water and create a unique image when lit from behind. The process involves soaking white paper, spreading it out to dry, and pressing it with a dry paper to create the watermark. This watermark, like the one on a banknote, can be seen when the paper is held up to the light.