Thanks for your quick reply which was informative.

What do you mean when you say "there is only network fees and no other additional charges".

When you mean network fees, do you mean the normal Internet charges I have to pay to my Internet service provider?

Hello Bitcoin gurus, I need to know some basic fundamentals of Bitcoin.  I did read and watch Youtube videos, but none answered my fundamental questions.

A bitcoin now is USD3800.

My fundamental questions:

(1.) Everybody on Youtube says that Bitcoin is Internet 'magic' currency and that anybody can get and send money just using the mobile phone.

My problem is this,  If I want to send some money (Say 3800 USD) to someone to buy something and I want to pay using bitcoin, FIRST I have to BUY Bitcoins (in this case 1 Bitcoin) by giving REAL MONEY to a bitcoin exchange. Is this correct?

So, it's not 'MAGIC' currency out of nowhere is it??

(2.) So, I pay 3800 USD to a bitcoin exchange and buy 1 Bitcoin. This 1 Bitcoin is my virtual Internet currency which is in my bitcoin wallet in the Internet.  So, NOW I can use that 1 Bitcoin to pay the other person USD 3800 equivalent using my mobile phone. Is this correct?

So, the only advantage is that there is no middle man (bank) involved. I don't have to pay service charges, be monitored or barred from bank or government authority. Is this true?

(3.) Now, I step up my BitCoin game and create a Bitcoin mining rig.  I run the mining software and I Make 1 bitcoin at the end of 1 year. The exchange rate for bitcoins now has gone up to 4000 USD per 1 Bitcoin. Now, if I want to ENCASH this bitcoin and get 4000 USD cash, can I do it? 

If I get cash of 4000 USD from a bitcoin exchange then where does the bitcoin exchange get the 4000 USD to pay me. Because bitcoin exchanges cannot 'make' money, that is real-money out of nothing can it?

Or is it the case where I CANNOT encash it.  I can only keep it in my virtual bitcoin wallet and pay it to someone who accepts bitcoins to buy stuff?

(4.) Who runs the bitcoin exchanges?? Who creates the software, the web-sites and monitors and managers it?

Because if Bitcoin is real peer-to-peer money and exchange, then surely there cannot be 3rd parties like bitcoin exchanges can it?

(5.) Can I pay by hard-cash in a bitcoin exchange or ATM. If so who counts the cash?? It has to be real-people right?

Your replies will be greatly appreciate.