Why A changing magnetic field induces circulating currents (eddy currents) in any conductive core, and those currents dissipate power as heat, wasting energy and heating the core. Slicing the core into thin laminations, each insulated from its neighbors by varnish or oxide, breaks up the large current loops so only small currents can circulate in each thin sheet. Loss drops roughly with the square of the lamination thickness, which is why power transformers at 50/60 Hz use stacks of thin silicon-steel sheets rather than one solid block. At higher frequencies, powdered iron or ferrite achieves the same goal by separating the magnetic particles with an insulating binder.