What is the difference between 'Favorites' (formerly known as Circle of Friends) and 'hike contacts'?

Favorites were earlier known as 'Circle of Friends'. 'Favorites' is a list of friends with whom you can share your status updates. You can add a contact to your circle of friends by tapping on the '' next to their name. You can safely post fun, embarrassing updates knowing that your parents or boss will not see them :)