I just wonder how bitcoin really works on local exchange around the world because if you will going to need a real money and you have bitcoin definitely you can sell your bitcoin and exchange it with real money in your local to be used. Well if all people around the world would exchange their bitcoin holdings is it possible because bitcoin is being back up by real money?
No bitcoin isn't being backed up by real money. The sole purpose of the value of Bitcoin is supply and demand, the supply of bitcoin is limited i.e. 21 million coins to be formed ever and out of which about 17 million are mined already. So when a person buys bitcoin he creates demand and makes the market and that increases the price so when bitcoin become popular the market rises and vice versa.