How is the ~$... file created when you open a document used?

I am teaching a Word Processing class and my students would like some more
information about the ~$... file that gets temporarily created whenever you
open a document. I understand that Word opens a "copy" of the file and you
don't access the actual document until you save it. The ~$... file is
unreadable through Word and I'd like some more information about what how the
file is organized and specifically how Word uses it. My assumption is that
it is a delta file showing the changes you've made against the original. Any
info I can pass on the my class would be appreciated.
.

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