Difference between subshells and process substitution

In bash, I want to assign my current working directory to a variable. Using a subshell, I can do this. var=$(pwd) echo $var /home/user.name If I use process substitution like so: var=<(pwd) echo $var /dev/fd/63 I have understood that process substitution is primarily used when a program does not accept STDIN. It is unclear to me what a process substitution exactly does and why it assigns /dev/fd/63 to var.