I agree with your understanding David.
But what can be read from a properly stained blade goes further than just the characteristics of the iron.
Once the blade has been stained we can also determine the characteristics of the pamor and the way in which it has been worked. Additionally we can identify the existence & extent of the heat treatment (sepuhan). More than this, we can also fairly easily identify any repairs that might have been carried out on the blade during its life.
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