A watermark is a recognizable image or pattern in paper that appears as various shades of lightness/darkness when viewed by transmitted light (or when viewed by reflected light, atop a dark background), caused by thickness or density variations in the paper. There are two main ways of producing watermarks in paper; the dandy roll process, and the more complex cylinder mould process.
Watermarks vary greatly in their visibility; while some are obvious on casual inspection, others require some study to pick out. Various aids have been developed, such as watermark fluid that wets the paper without damaging it. Watermarks are often used as security features of banknotes, passports, postage stamps, and other documents to prevent counterfeiting (see security paper).
A watermark is very useful in the examination of paper because it can be used for dating, identifying sizes, mill trademarks and locations, and the quality of a paper.
Encoding an identifying code into digitized music, video, picture, or other file is known as a digital watermark.
Read more about Watermark: Dandy Roll Process, Cylinder Mould Process, Watermarks On Postage Stamps and Stationery