There's nothing more frightening than the anger of a god. Especially the thunder god Thor and one day in Asgard all the gods heard his thunderous rage throughout the halls.
Loki had been more mischievous than usual and was about to pay for it. Thor had him by the throat and was threatening to break all the bones in his body - every day, once a day.
Loki had apparently cut short the goddess Sif's hair (Thor's wife) in her sleep as a practical joke. Now Loki was trying desperately to wriggle out of trouble.
Thor was about to make good on braking every single bone in Loki's body when Loki promised Thor he would replace his wife's hair with a head of hair even better than it was before. Hair of pure gold.
Thor calmed down and let Loki go with the promise that if he didn't keep good on his word Thor would keep his word about breaking Loki's bones.
Loki intended on keeping his word but but still had a mischievous way about him. He went down to deep, dark Svartalfheim, the home of the dwarves. The dwarves were the master craftsman of anything one can imagine.
The Trickster god commissioned two dwarves called the sons of Ivaldi, to craft a golden mane of hair for the goddess Sif. But he also lied and told the dwarfs that there was a contest in Asgard to prove which dwarven folk could show the best craftsmanship before the gods. They had to make three great items to pit against the other contestants.
The son's of Ivaldi believed Loki's lies and besides a beautiful head of hair for Sif they crafted a magical boat named Skidbladnir. This ship always had a fair wind and could be folded into one's pocket.
Also, the Sons of Ivaldi crafted a great spear called Gungnir. A deadly magical spear that never missed it's mark.
Loki took these treasures and in his greed and mischief he next went to the dwarves called Brokkr and Sindri. He once again claimed that there was a contest in Asgard but these two dwarves weren't given to trust Loki as easily as the sons of Ivaldi, so Loki ended up betting his own head that Sindri and Brokkr could not create such beautiful and powerful treasures as the sons of Ivaldi. The dwarves accepted that bet and began work on three precious items.
The first work of Sindri and Brokkr was the golden bristled boar Gullinbursti. A creature that could run through air and water better than any horse and shine with light in the darkness.
Loki did not intend to lose his head, and so during the forging of Gullinbursti he changed himself into a biting fly and stung the hand of Brokkr who pumped the bellows. The bite did not faze him and the great golden boar came out of the forge perfectly.
Sindri placed more gold in the fire as Brokkr continued to pump the bellows, keeping the flames white-hot. Loki once again took the shape of a biting fly and this time bit Brokkr on the neck but the dwarf seemed to not even notice and Sindri once again produced a marvel from the fire, a ring called Draupnir. A marvelous golden ring that would create eight duplicates of itself every ninth night.
Loki was watching Sindri now place iron into the Fire and he was becoming very anxious that his plan was falling apart so this time as a biting fly he attacked Brokkr on the eyelid and even though Sindri told Brokkr that this was their most important work coming out of the forge Brokkr had to take his hand off the bellows for a second to wipe the blood from his eye. What came out of the forge was marvelous but Sindri was less than pleased. The treasure that came out of the forge was a great war hammer. Its name was Mjolnir and the name meant lightning. This Hammer could crack mountains and always returned to the hand of the wielder if thrown, but the shaft of the hammer had come out short because of Loki's mischief. Upon further inspection though, the dwarves deemed it just as great as their other works if not even more powerful.
Loki immediately left to Asgard with all six precious items and told the gods what he had done. There was much murmuring amongst the Asir. Loki handed the gift of a golden head of hair immediately to Thor who was very pleased so the other gods became very interested in Loki's gifts.
To Freyr Loki gifted the great golden boar Gullinbursti and Skidbladnir, the greatest boat.
To Allfather Odin Loki gifted the magical spear Gungnir, that never missed it's mark and Draupnir, the magical golden ring.
And for Thor, the most powerful weapon of all, Mjolnir. Although the handle was short Thor grabbed it and hefted it high. He let out a roar as thunder cracked across the sky.
All those in attendance could feel the awesome power of Mjolnir in Thor's hand and knew it would prove to be indispensable in the battle against the giants of Jotinheim.
The gods deemed Mjolnir the greatest of items wrought. Thus Sindri and Brokkr stated they had a claim on Loki's head which immediately Loki piped up and said they may have claim on his head but not his neck.
The gods said that it was true that the dwarves had a claim on Loki's head but they could not harm his neck. The dwarves were understandably enraged but after talking to Odin they came to a compromise.
They sewed Loki's mouth shut and returned to Svartalfheim leaving Loki not so happy but still in possession of his own head.