The Sharingan (lit. "Copy Wheel Eye") is an genetic eye condition, Kekkei Genkai, that only occurs in members of the Uchiha Clan. It doesn't appear in infancy, but rather spontaneously released when the user is in a considerably stressful situation later in his or her life. The power of the Sharingan can be determined by the number of tomoe in each eye up to a maximum of three, which represents a fully matured Sharingan. It is rumored that the Sharingan descended from the Byakugan, although it grants different abilities and perceptions. The first and most well known ability is that it allows a user to accurately read and memorize almost any other technique, hence its name "copy wheel eye." However, the user must be physically capable to perform copied techniques. Its ability grants the user extraordinary perception and clarity of insight, allowing users to follow fast moving objects with ease and even predict the subsequent action of those objects. This awareness is also clear enough to see through illusions and the flow of chakra, but not to the same degree as the Byakugan. The third skill the Sharingan grants is the power of hypnosis, which involves proposing thoughts and actions to a user's opponent. This skill used in conjunction with the aforementioned talents of the Sharingan can allow users to perfectly mimic the movements of his/her opponents even before they do as if they are psychic. The Sharingan also grants other forms of hypnotism, which includes putting people to sleep, replaying the memories of someone, and creating illusions.
The only non-Uchiha Sharingan user is Kakashi, whose Sharingan eye was transplanted from Obito Uchiha. Although it is possible to transplant Sharingan eyes, they do not function well in ninja who are not descendants of the Uchiha clan. The use of the Sharingan puts a strain on the user's chakra, which is why Kakashi is often extremely exhausted after extended use of the Sharingan. However, this chakra strain is insignificant in members of the Uchiha clan, so they can use the Sharingan extensively with relative ease. Itachi, for example, has his Sharingan activated constantly.
There are levels or stages of the sharingan. When fully matured, the original sharingan has three marks around the pupil. During development though, it may only have one or two marks around the pupil. Each mark progresses in the effects of the sharingan. Below are other stages of the sharingan.
 Mangekyō Sharingan
The Mangekyō Sharingan (lit. "Kaleidoscope Copy Wheel Eye") is the heightened form of the Sharingan. The first users of the Mangekyō Sharingan is Madara Uchiha, the founder of the Uchiha Clan, and his little brother Izuna Uchiha. Several generations later, only a handful of other ninja came to acquire their own Mangekyō Sharingan, starting with Itachi, then Kakashi, and finally Sasuke. They and Madara are currently the only ones in the Naruto storyline who possess the Mangekyō Sharingan. Unlike a regular one, the Mangekyō Sharingan is unique between users, drastically changing the form of the Sharingan's tomoe seals when activated.
The Mangekyō Sharingan, despite granting the user great power, has one grave flaw--it deteriorates the user's normal eyesight. Extensive or repeated use of the Mangekyō Sharingan will hasten the deterioration process until the user ultimately becomes blind. However, Madara, after realizing this drawback, found a way to permanently restore his eyesight by transplanting the eyes of his little brother into his own sockets. In doing so, Madara came to possess a permanent Mangekyō Sharingan devoid of its original weaknesses in addition to incredible power, called the Eternal Mangekyo Sharingan.
When the Mangekyō Sharingan is initially unveiled, Itachi informs Sasuke that the only way to obtain it is by killing one's closest friend. However, it can be inferred that one doesn't necessarily have to kill his closest friend; Kakashi obtains his Mangekyō Sharingan long after his former teammates die. This is still a mystery and has yet to be revealed as to how he actually obtained it.
 Rinnegan (Final Stage)
It was later revealed that the Rinnegan is actually the final stage of the Sharingan. Madara Uchiha is the only known person to have unlocked the Rinnegan from the Sharingan. The proccess to unlock this have yet been revealed.
The Uchiha clan is actually the descendant of the older son of the Sage of the Six Paths. According to the tales of the Sage of the Six Paths, the older brother gained the powers of the Sage's eyes.
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