Knots form during the growing process of a tree. A tree grows in two different directions. First, it grows in height. As the tree grows in height, limbs start to form off the sides. These limbs are the source of knots.
The second direction of growth is in diameter. When the tree grows in diameter, it starts to grow over the ends of pruned limbs. This growth creates an area of clear lumber, also known as the quality zone. The closer you get to the center of the tree, the more knots you will come across. This wood doesn’t just get thrown away. It gets used for products that require less length and width like flooring. Boards with many knots become industrial grade lumber for pallets and railroad ties.
Knots affect the structural integrity of the wood. They are very brittle and easy to crack. They aren’t as big of a concern in furniture applications though when they provide character to a piece, making it different and unique. Many craftsmen fill the cracks or holes in the knots with epoxy or putty.
Knots can cause problems. They are hard on tools and you can have more chip out and tear out around the knot. Knots are also very dense. Given this, make sure to have sharp tooling when working with material that has lots of knots.