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Nalbinding is a likely predecessor to modern knitting. The earliest known scrap dates back to 6,000 BCE, and was found in a cave in Israel. Nalbinding from prehistoric times has been found through much of the middle east, northern Africa, and Europe. Source
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Knitting likely originates in Egypt, or elsewhere in the arabic world. Historian Richard Rutt estimates that it was invented during this time, and likely didn't begin in the form we see today.
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In 1268, the first known knitting guild is established in France. Knitting guilds would go on to be very important to the craft in Europe.
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In the 16th century, knitting became much more popular in the United Kingdom. It was during this period that the purl stitch was invented. Also invented during this time is loom knitting.
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Johann Schӧnsperger the Younger publishes the first known knitting pattern book in Germany, Johann Schӧnsperger the Younger
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William Lee, of England, invented the first ever automatic knitting machine in 1589. May knit items today are made on far more advanced knitting machines. Source
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Acrylic yarn is a very popular, cheap yarn to this day. Invented in 1893, it is one of the most popular kinds of yarn.
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In the first World War, knitting became very popular, as a way to send goods to soldiers in the UK. Knitting was promoted as a way to make people feel like they were participating more in the war. Additionally, knitting was used in the war to pass coded messages Source
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In the 1950s and 60s, knitting hit a huge boom. During this time, knitting was treated like a skill, not just as a hobby again and often taught to girls in American schools
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Ravelry is the largest repository of knitting patterns online, and was founded as a way to access patterns, and as a forum for knitting.