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Where does the Bitcoin money come from? You know how banks distribute money, how does someone have enough money to distribute bit coins which can be turned into money?

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No one does. Bitcoin have their value because people want to pay for it. When you buy a bitcoin, you buy it from another person. For selling, the same holds vice-versa.

Also when you trade them through an exchange, there is always someone else paying making the inverse transaction.

New bitcoins are generated through mining. The rate at which bitcoins are mined is predetermined and will end when 21 million bitcoins are in existence.

So basically, bitcoins are distributed by an algorithm and the value these bitcoins have is defined only by what the market will pay for them. If suddenly no one would want to buy a bitcoin from you anymore, it will be worth zero.

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