A potentiometer is a 3-terminal device used as a voltage divider.
Two terminals are connected to either end of a resistive element, while a third terminal connects to an electrical contact (the "wiper") that is moved along the element. If a current is passed through the resistive element, the voltage at the moveable contact depends on its position.
Most potentiometers have a curved resistor and a knob - the voltage is proportional to the angle that the knob is turned, so that sometimes the knob has a dial to allow a certain voltage to be set. Some potentiometers used for a volume control in analog audio amplifiers have a logarithmic scale - the voltage depends lograrithmically on the angle.
Some potentiometers are multi-turn, with a worm drive moving the contact along a straight resistor. Some are intended only for calibration (presets) and have a screw head not a knob.
It is the presence of three terminals that distinguishes a potentiometer from a variable resistor, though a potentiometer may be used as a variable resistor by using only the moving and one fixed contact. In this case, it is common to connect the other terminal to the moving terminal (the wiper).
A potentiometer is a term used in many different parts of engineering, the most common is a type of variable resistor which is made up of two wires, one attached to a conductor and the other touch's a insulating material connected to the conductor, the second connection which touch's the insulator can be moved further away from the other contact to increase the resistance.
Another type is a digital displacement sensor, this is a sensor that produces an emf and if a conducting object pass's the field produced by the sensor the output of the sensor varies from 0 to 1.
Kyle already said what it is, so I will add on to his explanation. A potentiometer can be used for taking measurements or add variable resistance. I have used a linear and angular potentiometer before for taking measurements. You can calibrate them so a certain resistance will mean either a certain distance or angle depending on the type you have. You can also use the variable resistance on many other applications. This could be the dial on your radio, stove, or anything else that you can set with a dial. Potentiometers are used wherever variability is needed in a circuit.
a potentiometer is a 3 pin variable resistor, with different ranges associated with their part number. 2 of the pins will have 1 resistance, while the third pin controls a variable resistance.
An adjustable voltage divider.
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