Doesn't a computer overwrite those old data by itself?

Magnetic media trap data due to oxide or metal particles. If you delete a file, the computer aligns those particles in series or lines. Are you overwriting the file? Then only those particles that form the new signals change direction, . The other lines remain unchanged. This sometimes creates imperfect images and rewrite errors in the new data. Demagnetisation completely removes those old, remaining lines. This immediately removes the possibility of rewriting errors.

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