The Chemistry of Currency

Dr. Kenneth Lyle, Duke University Department of Chemistryby Gabrielle Hodgins and Dr. Kenneth Lyle, Duke University, Durham NC

The wonders of magnetic ink!


Demonstrating the magnetic ink used in printing US currency has proven to engage audiences of all ages because of its relevance to everyday life.  Nearly everyone has used machines that distribute and/or accept currency but few understand how the machines distinguish between the various denominations.  The key is in the face of each denomination.  Magnetic ink is used in the printing of the currency.  Each denomination has a different face and, therefore, a different magnetic signature.  Similar to a bar code reader, the machines recognize the denomination by its magnetic signature.  A strong magnet, such as a neodymium magnet, can be used to demonstrate the magnetic character of US currency.

A ferrofluid is used in the manufacturing of the magnetic ink.  A ferrofluid consists of collidal particles (nanoscale) composed of iron (II) and iron (III) compounds such as FeCl2 and FeCl3.  A ferrofluid is attracted by a magnetic field but does not become permanently magnetized.  To show the ferrofluid present in the ink, a US dollar bill is added to water and mixed in a blender.  The mixture is then transferred to a clear plastic cup and stirred while holding a strong magnet on the outside of the cup.  The ferrofluid adheres to the inside wall of the cup.



Ferrofluid:  Ferrofluid consists of nanoscale particles (~10 nm in diameter) of a compound of iron in both 2+ and 3+ oxidation states dispersed in a liquid (oil or water) that are usually coated with a surfactant resulting in a colloidal dispersion.

Diamagnetism:  Particles are repelled by a strong magnetic field; all electron spins are paired.

Paramagnetism:  Particles are attracted by a strong magnetic field; unpaired electron spins exist in the particles; iron is paramagnetic.

Ferrimagnetism:  Results from opposing but unequal magnetic moments of the atoms in the different sub-lattices (Fe2+ and Fe3+).

Ferromagnetism:  On a macroscopic scale, the substance can become magnetized; iron is ferromagnetic; how machines detect value of currency.





  • Wear safety glasses.
  • Neodymium ceramic magnets have very strong magnetic fields that could damage cell phones, credit cards, computers, and other electronic devices. Keep the magnets away from them.
  • Keep powerful neodymium magnets far apart from one another, as they are very strong and when in close proximity they could snap together and cause injury. Being ceramic, the magnets potentially could shatter as well.



Magnetic properties of the bill

Hold one end of the dollar bill at the edge so that it is suspended lengthwise vertically in the air.  Bring the neodymium magnet near the bottom edge of the bill; the bill is attracted to the magnet.  If available, show that the magnet affects each denomination of currency (especially show how the various faces on the bill are attracted to the magnet).

Bring the magnet near the Federal Reserve Seal, which is not magnetic, so is not affected.


The iron (ferrofluid) present in the ink of the bill

  • Place a dollar bill in a blender and add about a cup of water.
  • Thoroughly blend.
  • Pass the liquid through a sieve to remove the bits of paper allowing the liquid to flow into a colorless transparent cup.
  • While holding the magnet against the outside of the cup, stir the liquid with the white plastic spoon for about minute.
  • Place the back of the spoon inside the cup to where the magnet is located on the outside of the cup. Allow the mixture to come to rest.  Remove the magnet while continuing to hold the spoon against the side of the cup.  A black material (iron ferrofluid) should be visible against the white background of the spoon.



  • Shredded dollar bill may be placed in the trash.
  • The liquid solution resulting from the blending of the dollar bill in water can be safely poured down the drain.
  • All other items can be washed, if needed, and reused.


Magnetic Ink in US Currency can be performed as a stand-alone demonstration or can be combined with a series of demonstrations.  We have included it as part of our Chemistry of Currency and Unique Metals outreach event presentations.  Gabrielle Hodgins learned this demonstration and performed it for her chemistry class and at several outreach events.  Learning this demonstration stimulated her interest in ferrofluids and other nano-sized substances.  The following are her reflections on learning about ferrofluid, including its use in US currency, and presenting at outreach events.

Ferrofluid Bolt Kit - Educational Innovations Inc.“My first time performing The Chemistry of US Currency was as part of Nano Days held at the North Carolina (NC) Museum of Life and Science, Durham NC.  We staged Unique Metals, highlighting many different nanoscale metals, including colloidal gold, silver, and my personal favorite, ferrofluid.  Ferrofluids were first introduced to the children by showing them a vial of ferrofluid and allowing them to observe what happens when they bring a magnet near.  We also showed them a larger scale version—The Ferrofluid Bolt—pictured at left, from Educational Innovations.  We then followed with demonstrating that US currency is attracted by a magnet and then extracting the ferrofluid from a dollar bill.

I was personally excited to bring this demo to the museum.  During practice and even on the day of the event I was constantly discovering new ways to explore and demonstrate the properties of ferrofluid.  Through a particularly messy accident, I discovered more of the unique properties of ferrofluid.  I was playing with a magnet in the range of my ferrofluid on the bolt display.  As a result, the magnet in my hand was pulled in by the magnetic field around the bolt and the two crashed together.

Unfortunately, the small magnet broke and everything in the nearby vicinity was soaked in the deep brown ferrofluid.  A portion of the ferrofluid collected at the base of the display.  This puddle was in the aluminum pan directly above the neodymium magnets that were used to magnetize the bolt.  Instead of being spiky and fluid as it was on the bolt, the puddle was impermeable to the touch and totally flat.  While unsuccessful at the time, the magnet I was playing with turned out to be an interesting experiment in itself.

I had the opportunity to finesse the demonstration at a second event—a Mad Materials event held on Duke’s campus.  Here, we included a large iron magnet in the display to give a reference point that could be easily recognized and understood.  For this event, I taught another demonstrator the currency experiments.  Watching and photographing others presenting this demonstration gave me a wonderful opportunity to reflect on the various presentation styles and the audience’s engagement.  By the end of the event I was ready to be back behind the table as the presenter and use what I had observed.

With each group of children, my series of ferrofluid demonstrations got stronger and smoother as I gained familiarity with the material.  My excitement about the ferrofluid was captured by my audience as they, too, seemed to think my demonstration was pretty cool.

Overall, spearheading The Chemistry of US Currency has been a wonderful experience.  Ferrofluid is such a unique material to work with, like nothing most audiences have seen before.  To this day I get excited to pull out the small jar of ferrofluid to experiment with and show it to others.”



  • For more information about the magnetic ink used in US currency see:

  • For more information about magnetism, diamagnetism, paramagnetism, ferrimagnetism, and ferromagetism see:


*Gabrielle Hodgins graduated from Duke University with a major in Environmental Science and Policy with minors in chemistry and biology.

**Dr. Kenneth Lyle is a lecturing-fellow in the Department of Chemistry at Duke University.  Dr. Lyle instructs the CHEM 180 Chemistry Outreach Service Learning Course.

The Powell Family Trust, the Duke-Durham Neighborhood Partnership, and Biogen Idec–Research Triangle Park, fund the Duke Chemistry Outreach Program.

Reprinted with permission from the October 2013 edition of CHEM 13 NEWS.  For more great chemistry experiments and activities, visit Chem13 News.

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