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A dwarf's beard is his or her defining characteristic. Dwarf beards are an indicator of social status among the middle and upper classes, and function much like a Scottish tartan, identifying a dwarf's family heritage.
It is a well-known fact that dwarves use their coarse, thick beards in order to smooth rough areas of stone. More skilled dwarves can engrave images onto stone, which has led some scientists to believe that a dwarf's beard is a separate, sentient lifeform in symbiosis with the dwarves. The dwarves provide the beards with nourishment in their spilled alcohol and food, along with the prodigous amounts of sweat working dwarves produce. The beards provide warmth, storage for goods and a pouch of sorts for baby dwarves.
Dwarven hair is extremely hearty; the average dwarf hair is many times longer and several times thicker than the average human hair. It is usually straight. The range of dwarven hair colors is quite large; common colors include dark blues, black, any number of shades of gray, silver, white, brown, copper, rust, and even flaming orange-red.
A dwarf's beard begins growing before birth, and is usually less than two inches long at birth. Children of the dwarven nobility, however, are born with much longer beards, sometimes long enough that it is wrapped around the infant's body. Human doctors become wary of this sort of thing, but dwarven mothers are often completely oblivious to their own pregnancy until their baby drops out of them, often times in the middle of a workshop, or in the middle of a tall staircase, or even while chopping a goblin's head off.