A captcha is a way to distinguish human users from bots. As such a large part of internet use is made up of non-human traffic, it has become essential to be able to create walls where bots cannot go. This is especially helpful in terms of web analytics.
Captchas often take the form of hard to read words or simple puzzles which bots cannot work out. They are generally placed as a block at the end of a form to stop spam comments or automated entry into a site.
Captcha stands for Completely Automated Public Turing test to tell Computers and Humans Apart.
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