My Mental Model for the World of Crypto by @ttunguz

Exchanges - exchanges are the marketplaces where people trade tokens to determine their value. Exchanges come in two flavors. There are centralized exchanges which swap tokens between two participants on the same exchange. And there are DeFi exchanges, short for decentralized finance, which enable trades of tokens between two people directly without an exchange in the middle. Think eBay vs Craigslist for crypto and you’ll have the gist.

Chains - these are the databases storing transactions executed on exchanges. There are many chains. Each has its own strengths and weaknesses that span attributes like speed, privacy, cost to write transactions, and developer friendliness. Protocols must decide which chain(s) they will support. The same is true for exchanges.

Miners/Stakers - the big idea in crypto is that all transactions in chains should be public and that no one entity should control the database. This is a hard problem to solve. Most databases today are centralized. For a public globally distributed database to function, computers must perform complex and computationally expensive math to ensure the transactions are consistent and accurate across all the database nodes.

Software vendors - a software ecosystem is blossoming around crypto. Software spans many categories. Information brokers to help traders understand market trends, compliance tools, tax software, protocol debugging tools, even smart contract insurance. There is also a category called oracles which provide API endpoints to supply smart contracts with data.