Acharya Prashant explains that there are two distinct types of memory. The first type is based on the ego, where a person remembers a specific subject with a name, form, and shape. In this process, both the rememberer and the object of memory exist separately, and this relationship actually creates a distance between them. This kind of memory solidifies the ego, making a person limited and crystallized. It often leads to 'absent-mindedness' because the mind becomes preoccupied with mental images, causing a person to lose touch with the facts of the present moment, such as failing to see a pit on the road while lost in thought.