How are any profits realized from Bitcoin transferred/converted into dollars that can be used for normal purchases, etc.?
That’s easy - there are innumerable exchanges where you can trade bitcoin for dollars if you wish, if you find a need to transact in dollars still (more businesses than you might think take bitcoin directly anyway). Or you can just move to El Salvador where it is legal tender nationwide. I was there recently on a missions trip and it appears to be booming, largely due to crypto.
I suppose, because I dont own BTC, that you rely on being able to ‘cash in’ with participating merchants. Otherwise, you have to ‘sell’ your BTC on the market.
I can sell my mutuals and IRA investments through my broker just the same as selling BTC, except everything is according to the law and not really secretive or untrackable, which to the best of my understanding is the selling point of BTC. This is also why its so popular in money laundering and tax avoidance.
I am not for govt prying into my affairs, but I do want to stay within the laws and not on the IRS radar.
There are exchanges like Coinbase and others and there is a market for cryptocurrencies. You can see the valuations of each up to the second on the market. You can sell your crypto and convert it back to dollars just as you can convert dollars into crypto by buying any of the various crypto currencies.
All cryptocurrencies are tied to blockchains. Various cryptocurrencies do different things. Some do nothing really. Some are a store of value (like Bitcoin) that cannot be manipulated by any government. There is a set amount of Bitcoin that can ever exist. There cannot possibly be any inflation. Starting to see why governments hate it?
Other crypto currencies are tied to blockchains that do quite useful things. Ethereum, Chainlink, XRP, etc.
Its the early days of this asset class so there are plenty of shady characters and yes, scams. Profit potential is also much higher than with any other asset class - or at least it has been so long as crypto currencies have existed which is about 14 years at this point.
There’s much more but those are the basics.