Naturally magnetic lodestones were found in an area of Greece called Magnesia and by the 1100s, lodestones were used for navigation. In 1269, Petus de Maricourt discovered that magnets have two poles.
Significant progress in the understanding of magnetism was made in 1600 with the experiments of William Gilbert. Gilbert was the first one to realize that Earth is a giant magnet and that magnets could be made by beating wrought iron.
In 1820, Hans Christian Oersted demonstrated that magnetism was related to electricity. He showed that a wire carrying an electrical current creates a magnetic field by bringing a wire close to a magnetic compass, which caused the deflection of the compass needle.
In the late 1800s, William Thompson created the most accurate compass of the time. It was a liquid compass; the needle was magnetized by a lodestone and a liquid, alcohol, which would not freeze in cold temperatures.
In 1930, the Japanese discovered the material ferrite, a compound containing ceramic material and iron. Ferrite was used to make strong permanent magnets. In 1931, another Japanese scientist, Mishima, discovered that a compound containing aluminum, nickel and cobalt generates a stronger magnetic force than ferrite. The compound was named after the three elements and is known as alnico.