Why does molten iron deep inside Earth turn the whole planet into a magnet?

Because the liquid iron in Earth's outer core works like a giant generator, called the geodynamo. The iron churns, and Earth's spin twists its flow. Moving liquid metal carries electric currents, and those currents make a magnetic field. A plain magnet, like a compass needle, couldn't survive down there. It is far too hot for iron to stay magnetised. So the field has to be made fresh, all the time, by moving metal.

The outer core is a shell of molten iron and nickel about 2,260 kilometres thick. Heat from below keeps it moving. Some comes from the solid inner core, which slowly grows as iron freezes onto it. As it grows, it releases heat and pushes lighter elements out into the liquid. Radioactive uranium, thorium and potassium add more heat. As the hot iron rises, Earth's rotation bends its path through the Coriolis effect. The flow curls into twisting loops, the kind a dynamo needs to keep a field going.

Without that churning, the field would fade. Electrical resistance alone would wipe it out in about 20,000 years, a blink in geological time. The solid inner core is too hot to be a magnet itself, but it probably helps keep the field steady. Inside the outer core, the field is about 50 times stronger than at the surface. Out in space, it acts as a shield. It protects life from radiation and keeps the solar wind from stripping away the air. Mars lost its magnetic shield about 4 billion years ago, and the solar wind has been thinning its atmosphere ever since.

Working this out took centuries. In 1600, William Gilbert concluded that Earth itself is a magnet. He guessed it was a permanent one, like a lump of magnetic lodestone. In 1919, physicist Joseph Larmor suggested a dynamo instead. Later, geophysicist Walter Elsasser showed how electric currents in the liquid outer core could make the field. He is now seen as a father of the modern theory.