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Nearly everyone has heard of Damascus Steel, but this is not a super-metal. Damascus steel is just the name of two types of steel folded together to make a strong (for the time) blade.
Now, how Damascus Steel is made is first, the bladesmith hammers flat several pieces of higher- and lower- Carbon steel. Then he places them alternately one on top of the other: Higher carbon, then less carbon, then higher, then lower, etc. They are then heated, hammered flat, and folded in half. This process is repeated several times, doubling the amount of folds each time. This alternating between hard, brittle steel and soft, strong steel made the Damascus blade considerably strong; the strongest known to Europeans at the time.
Once the Bladesmith is satisfied with the amount of folds, he hammers it into the shape of the blade. Before the metal cools, the bladesmith dips it into some acid (or oil), cooling it quickly, which hardens the steel.
The type of steel in the knife that has either more or less (I don’t know which) Carbon reacts with the acid faster than the other type, and therefore turns black, showing the trademark swirling layers.
The Crusaders first saw these strong blades in Damascus, on their way to Jerusalem, so resulting in the name: Damascus Steel. Actually, these blades were developed around India, gradually brought by traders through Persia to Damascus.