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In physics, matter is considered to possess two kinds of energies ââ kinetic or potential energy. Kinetic energy is defined as the energy an object displays or possesses because of some kind of motion or action. Potential energy, on the other hand, is the energy an object possesses or displays by virtue of its state of rest. While potential energy is non-related to the environment of the object, kinetic energy is completely relative to the other moving or stationary objects in the environment.
Just to clarify as some of the answers above only refer to Gravitational Potential. Potential and Kinetic are the two main types. Kinetic energy is the moving energy of something. This could be movement in heat, sound, vibration, or generally movement. Potential Energy is the stored energy giving something the potential move, due to it being in the vicinity of a force field. This force field may not necessarily be gravitation, but also electromagnetic, strong or weak. Types of energy: 1. Mechanical (potential & kinetic) 2. Heat 3. Radiation (incl.