Gyricon, the first enabling technology of e-paper, was developed a team led by Nick Sheridon at Xerox’s Palo Alto Research Center (PARC) in early 1970s.
Gyricon contains a lots of small spherical beads, sandwiched in between two thin transparent plastic sheet. Each bead is bichromal, meaning it contains two opposite colors (e.g., black and white) on each side of the sphere. These beads are imbedded in cavities filled with oil that allows these beads to rotate freely. Each side of the bead has its own electrical charge (positive or negative). These beads are rotated by exposure to an electrical charge; they rotate fully to display as black or white, or partially (in response to lower electrical charges), to display a range of grey shades. Images are created by the beads with distributed orientation, and are bi-stable: they remain fixed in position until another electrical charge is applied to change the orientation of the beads.
The following video demonstrates how Gyricon works: