A solid metal ring is placed on an iron core whose base is wrapped in wire. When DC current is passed through the wire, a magnetic field is formed in the iron core. This sudden magnetic field induces a current in the metal ring, which in turn creates another magnetic field that opposes the original field. This causes the ring to briefly jump upwards.
If there is a cut in the ring, it cannot form current inside it, and thus will not jump.
When the ring is cooled in liquid nitrogen, the resistance of the metal is lowered, allowing more current to flow. This lets the ring jump higher. However, the magnetic field curves away at the top of the iron coil, meaning with DC power, the ring will never fly off the top.
When AC current is passed through the wire, the ring flies off the top of the iron core. This is due to the fact that the current lags the emf by 90 degrees in inductors (which is what we have here). This yields forces on the ring that are always pointing upwards, even as the current oscillates.
Source: MIT TechTV
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