Rheostats are a two-terminal variable resistor while potentiometers have three terminals. Rheostats are used to adjust current but potentiometers adjust voltage. They are used for low-power applications which are less then one watt. For higher than this, they are built with resistance wire wound round a semicircular insulator with a wiper sliding from one turn of the wire to the next. Rheostats are sometimes made from resistance wire wound round a heat-resistant cylinder. Wire-wound rheostats are the most commonly used for ratings up to several thousand watts. A slider is placed on the wire to create more or less resistance on the circuit. The resistance element can be made of metal wire/ribbon, carbon or a conducting liquid depending on the application. Potentiometers can work as rheostats but rheostats cannot work as potentiometers. Rheostats were once common features in light dimmers, heaters, ovens and motor speed controls but they are not very energy-efficient and have largely been replaced by pulse-width-modulated controllers. Unlike rheostats, these dissipate little power as heat. Nowadays, rheostats can be used in electrical switches containing a variable resistor to finely adjust the amount of current. However, they tend to be used in devices requiring high voltage or current, such as welding controls.

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