Pencil tool is almost identical to the brush tool. The only difference is that it contains the auto erase option which creates artwork with background color over the foreground color.
Pencil tool doesn't allow the user to define hardness of the brush stroke and gives a solid edge drawing while brush tool gives soft edged drawings too. This tool is used to draw artworks using minimal pixels at a time. If the size is increased it works the same as the brush tool in all other aspects.
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