I find myself explaining how addresses and transactions work fairly often (and also just how Bitcoin in general works). Over time, I've come up with a few analogies that I think work fairly well.
It's not often we send physical letters in the mail these days, but for the most part we all understand how it works. If you understand how the US postal service works, then you already kind of know how Bitcoin works.
Bitcoin addresses are analogous to your home address. If I give you my address then you can send me a letter. However, in the Bitcoin world, we primarily only ever send envelopes filled with stamps (Satoshis). We still have to put stamps on our envelope (Fees). If we put a lot of stamps inside our envelope, then sometimes we have to put a lot of stamps on the outside envelope as postage or else the mailman won't accept our letter. ...unless he's a family friend or something (Miner).
At home, we can have a lot of letters (Transactions), and anyone can send us a letter if they have our address. I can even create a letter, address it to someone, and then wait a few days before I give it to the mailman. Again, if I don't put some stamps on that letter, the mailman won't take it. On the other hand, I can also put far too many stamps on the envelope than necessary. The mailman will still take that one though.
When someone sends me an envelope full of stamps, I don't have to send all of those stamps at once. I can mix and match stamps that were sent to me from multiple envelopes. I can also send an envelope with a bunch of stamps back to myself, however, I still lose the stamp I put on the envelope.
I can have multiple mailing addresses just like I can have multiple bitcoin addresses. Sometimes I might even have two addresses that map to the same house! ...but that's complicated. (Compressed Public Key)
If someone sends me a letter full of stamps to my PO box, I can take the stamps out of that letter and combine them with the stamps someone sent me at my home address, and I can wrap both sets of stamps in a single envelope and send them to someone else. I can also choose to only send a few of them, and send the remainder back to my PO box.
How memo works is also similar to the postal analogy. Instead of just sending stamps, I can also send notes. The notes aren't worth anything, but the person I send it to can read it--but they can't use my note as postage for their own letter. I can put a note and a bunch of stamps in the same envelope though, and then they can send me a note back with the stamps I provided them.
SLP tokens are also very similar. Instead of sending a note, I can send you a bunch of dollars. I can't tape a dollar to the outside of the envelope instead of putting a stamp on there--the mailman won't accept that (yet... (Vin 😉))--but if the recipient takes the dollar to someone else, they might be able to find someone else to give them some stamps in exchange for one of the dollars. Unfortunately, because of how envelopes work, I cannot send both a note and a dollar in the same envelope. (OP_RETURN)
Anyway, hopefully this analogy is useful to you as information, or perhaps it can be useful to help explain Bitcoin to a friend. If you're new to cryptocurrencies, then please ask questions! This whole blockchain world is new and complicated; there's absolutely no shame in not knowing or misunderstanding how it works.
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source https://www.reddit.com/r/btc/comments/e6cfds/not_sure_how_addresses_work_heres_an_analogy/
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