How does Loki's staff work?

Question

What was the concept behind the staff that Loki used in the Avengers movie? It contained a blue crystal (presumably a part of the tesseract?) He uses it to put people like Hawkeye under a spell of sorts and also used it to blast stuff.

I assumed that the tesseract could only be used as an energy source. It is evidently not true if the tesseract is used to hypnotize people. Can humans also use the tesseract for such purposes or was Loki the only one who could harness these powers? What additional uses can a tesseract have?

Answer 1

Loki is an Asgardian. In the Marvel Cinematic Universe, he is a member of a super-advanced race of beings that live on other planets far from Earth, but connected via technological tools. Loki's staff was believed to be one of those tools.

UPDATE: It appears Loki's Staff (or the Chitari Staff) does house the Infinity Mind Gem. Revealed in a recent trailer and expounded upon by ScreenRant:

• During the Avengers Infinity War teaser that was shown at the event, it was also confirmed that Loki’s scepter is one of the Infinity Gems Thanos (Josh Brolin) will have in his Gauntlet.

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1. Loki's staff is an alien device used to focus his power. The Asgardians use tools similar to the staff that appear to be a form of magic (but are just another super-advanced science hidden behind mummery and gestures) to augment their physical, mental or psychic abilities, of which Loki appears to have all three in abundance. If we use the meme of sorcery, the staff was nothing more than a focus for his power, allowing him to tap into and lock onto The Tesseract/Cosmic Cube.

2. There is no canon relationship between the crystal in the staff and the Tesseract/Cosmic cube. Since Cosmic Cubes have never needed any other tools to perform their powers, perhaps the similarity in color signified a synchronization process between the two devices. Perhaps the designers of the movie wanted to show there was a relationship between the two devices, especially since the staff is later used to disrupt the Cosmic Cube's dimensional doorway.

3. Later, it was mentioned by Professor Erik Selvig that he had encoded a shutdown sequence inside of the crystal by an as yet undisclosed means. All previous canon regarding the Cosmic Cube says they cannot be easily destroyed and pieces cannot be shaved off. So it is more another sign of a technological synchronization between the Cube and the staff.

4. The hypnosis power was more likely an aspect of Loki's psychic ability and as a well known trickster, a tool he was likely to employ in the presence of minds able to be dominated by his own. If he was using a linkage to the Cube, he may have opened the minds of his victims to the dimension inside of the Cosmic Cube making them more vulnerable to Loki's powers.

Answer 2

The staff is a magic weapon from Asgard and the crystal he uses is different from the gems from the infinity gauntlet. It is the mind gem, not part of the tesseract.