Where do the sparks come from?

A spark is a shard of metal, heated until it glows. Sparks appear as a result of the mechanical interactions between sharp cutting tools, in this case the flint and the blade of the firesteel. That is, in simple terms, the sharp edge of the flint removes a sliver of metal with a strong, glancing blow. As firesteels are made of steel with a high carbon content, the kinetic energy transferred to the little piece of metal ignites the carbon within to produce sparks. It is very important the firesteel has previously been subjected to the process of quenching. It's due to the quenching process that the carbon enters a special state in which its ignition becomes possible.