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Digital information is stored via magnetic means on computers. Placing a powerful magnet near one will foul it up by changing the magnetism to one particular direction - making them all 1's or all 0's. The effect is something like starting with black and white newspaper photo and then pouring black ink on it. All the areas that used to be white are now black - along with all the ones that were black to begin with - and now there is no more picture. One way to wipe hard drives prior to disposal is to subject them to a very strong magnetic field.

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Q: Why should you never put powerful magnet near a computer?
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