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Heat-induced structural transformation in nanodiamond of diameter is investigated by tight-binding molecular dynamics simulations using the environment-dependent tight-binding carbon potential. The nanodiamond is found to transform into a tube-shaped fullerene via annealing. Three interesting mechanisms for promoting inner carbon atoms of the nanodiamond into the surface carbon atoms of the tubular structure are observed. The “flow-out” mechanism prevails at temperatures lower than 2500 K and the “direct adsorption” and “push-out” mechanisms are observed at higher temperatures.