What is a sacrificial anode?

A new anode on the  right, as compared to one on the left had been in use for over 4 years. Note the bare core wire.

This is a rod made of magnesium or aluminium that's formed around a steel core wire and is screwed into the top of the tank. An anode rod is necessary because it prevents any corrosion of a water heater's metal lining. As long as a serviceable anode rod is installed, the metal of the rod will wear away instead of the water heater lining. The anode rod produces an electro-chemical reaction within the water, which protects the water heater.

The single most important factor in whether a steel water heater lives or dies is the condition of its sacrificial anode. For more than 60 years, it has been used as a key part of the rust protection of a tank, although few people know it's there.

this tank is beyond help a new anode fitted in time would saved this tank.

A standard domestic hot water tank will have one primary anode. Commercial tanks have from one to five. Special aluminium/zinc sacrificial anodes or powered anodes can be used to resolve odour problems caused by bacteria in some water. But if you have a vacation home where the water heater sits idle for long periods of time, using them may not be a solution. 

Anode rods are attached to the top or site of the water heater with a hex head screw. Most rods are approximately 50 to 80cm  in length. The core of an anode rod is a steel wire framed by one of three different metals: aluminium, magnesium or zinc. All anodes are made from one of these three metals, and each type of rod has a particular use.

• Aluminium. Aluminium rods are the best for hard water conditions. An easy way to check if your area has hard water is to check your anode rod. If the steel wire of the anode rod core is exposed, the rod is completely gone, or there is extensive passivation (see Anode Evaluation) this is indicative of hard water conditions. A word of caution concerning aluminium rods. Today, many scientists believe that aluminium in the diet is linked to the development of Alzheimer's disease. Therefore, you should never drink or cook with water from a water heater tank which uses aluminium rods. 
• Magnesium. Magnesium rods are the most common type of anode rod. Magnesium works best in areas where the water is not hard. When replacing a magnesium anode rod, make sure the water heater lining is not corroded. If you install a new magnesium anode in a tank that is corroded, the subsequent electro-chemical reaction can cause a build up of hydrogen gas in that tank, which often leads to water leaks.
• Zinc. Zinc anodes are simply aluminium rods with a portion of zinc mixed with the aluminium in a ratio of 1 to 10. The only reason for using an anode rod with zinc in it is to reduce any sulphur smell in the water. A new water heater almost never comes with a zinc rod already installed.

Anode rods are attached to the top or site of the water heater with a hex head screw. Most rods are approximately 50 to 80cm  in length. The core of an anode rod is a steel wire framed by one of three different metals: aluminium, magnesium or zinc. All anodes are made from one of these three metals, and each type of rod has a particular use.

Now that you know what to look out for you can inspect and evaluate your anode rod and install a new one, if necessary, by following these steps.

1. Anode Check-ups. Your water heater can last for many years, even decades, if you check the anode rods regularly. Under normal water conditions, you should inspect the rods at least once a year and replace every 2 years. If you use softening agents such as rock salt or phosphates, the rate of corrosion can be up to three times faster than calcium carbonate—the actual cause of hard water. If you use other softening agents, you should inspect the anode rods at least twice a year. A sacrificial anode's life depends on the quality of the water, the amount of use the tank gets, the water temperature, and the quality of the tank -- meaning how well it was constructed. When salt is added to the water (as in softened water), anodes corrode more quickly. Water softeners help reduce sediment, but anodes can corrode in as little as six months if the water is over-softened. Do not soften to zero. Leave 50-120 ppm of hardness.
2. Anode Evaluation. Often times the rod will be covered in calcium carbonate. Calcium carbonate is not corroded metal from the anode rod. Most times, you can remove it easily with a towel or simply brush it off with your hand. Once you’ve removed any calcium carbonate build-up, inspect the rod. If there is more sacrificial metal on the outside of the rod than exposed portions of the steel wire centre, the rod is still good. If you are not sure replace.

IF YOU DO NOT FEEL COMFORTABLE DOING THIS YOURSELF, CALL A PROFESSIONAL.

Why We Don't Like Aluminium Anodes all of our tanks come as standard with Magnesium Anodes

Our domestic hot water heaters and combination tanks come with magnesium anodes. We prefer magnesium. 

We dislike aluminium for reasons and those are:

1. Aluminium, being lower on the Galvanic Scale than magnesium, produces less driving current between anode and cathode (in this case, the tank is the cathode). We think that means it doesn't do as good a job of protecting the tank, especially in softer waters.

2. It produces about a thousand times its original volume in corrosion by product, most of which falls into the bottom of the tank as a sort of jelly, and adds to sediment build up there.
3. That gunk also occasionally floats out the hot-water port, appearing as a cottage cheese-like substance clogging aerators and filters.
4. The rod actually expands as it corrodes so that it is hard, or maybe impossible to remove one a few months after installation because its diameter is bigger than when it was installed.
5. Along with that, it has a tendency to split off from the core wire, so that chunks fall into the bottom of the water heater, where they stop being anode and start being junk. That also means that if you try to take one out at that point, it may split away from the core wire and snag the underside of the top of the tank, like a fish hook.
6. The build-up of sediment on the bottom of gas heaters encourages noisy operation, and some people can hear their water heaters loud and clear at night, which is not helpful for those wishing to sleep.

we could add a few more but no life is to short.