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The Sharingan is the bloodline trait of the Uchiha clan. It was first seen in the ancestor to the Uchiha clan, Indra, and is considered to be one of the three great dojutsu, along with the Byakugan and the Rinngan. Although this is a trait of the Uchiha, not every member of the clan has the potential to activate it. One it is awakened, however, it turns the users eyes blood red, and gives them extra comma shaped pupils, called tomoes. These tomoes appear in stages as the user becomes stonger, with the limit being three. As the user progresses between one and three tomoes, he/she gains a better understanding of the eyes and can use their abilities to a greater extent.
The Uchiha's were said to be a cursed clan, because of the Sharingan and its ties to emotion. When one experiences the extreme pain of loss, or extreme hatred, they can awaken the eyes power through a special kind of chakra that is released at that point. This chakra reacts with the optic nerve, and changes the persons eye from normal, to extraordinary.
The abilities of the Sharingan are pretty standard across the board. They include: the ability to see and differentiate between different people chakra, noticing others' chakra flow, a very clear perception, being able to notice and copy how to perform jutsu used by the opponent, faster reaction times, and lastly, heightened intellect.
The next stage of the Sharingan is not achieved by most users. The Mangekyo Sharingan is one that can only be obtained by either experiencing the loss of your best friend, by ways of your own actions, or by having one transplanted into you. By doing this the latter way, one would obtain an Eternal Mangekyo Sharingan. The reason that this is a big deal is because with normal use of MS, one can tell that their eyesight diminishes. This means that after prolonged use, the user would go completely blind. An EMS user can spam theirs all they want without losing their sight.
MS and EMS users have abilities that vary wildly across the charts, with some being more standard than others. Ususally, an MS or EMS user can use Susanoo, Amaterasu, and a strong genjutsu. But other users have been seen to have things such as Obito/Kakashi's time/space technique, Izanagi, and Izanami.