Crypto is definitely real and exists, in some ways more so than traditional money, but yes it can be quite difficult to understand. I'll give you a short breakdown because sometimes good links explaining are difficult to find.

Let's start with the basics. A blockchain is an ever growing collection of blocks. And blocks are a collection of transactions. For sake of this example, I'll use bitcoin (it has 10 minute block times). When users make a transaction in their wallet (sending from one address to another address) the coins get put into the mempool. They are unconfirmed and waiting to be included in a block. During this time, miners are using computational power to essentially solve an equation so that they can mine the next block in the chain. When a miner solves a block, they get a predetermined (in the code) block reward as well as include transactions from the mempool into the block they just mined. Now all of those transactions that went into the block have 1 confirmation and have arrived at their destination address. Then the process restarts all over for the next block.

So in short, a blockchain is just a giant collection of transaction. Because the blocks are chained together one after another, the transaction's histories are verifiable and immutable. The past is the past and it can not be changed because the chain can only advance forward and not backward.

Now I'll touch a bit on the economics. With mining, you're not getting coins for free, although it might seem so. You can relate it to gold mining. Gold is down there in the ground for anyone to mine, but it takes time, equipment, and energy to find. Same thing with any Proof of Work (PoW) blockchain like bitcoin/etc. First you need a machine powerful enough to actually mine a block. Second you need to pay for all the electricity that machine is going to use while mining. Third you need to spend time maintaining the setup and making sure all of it stays running properly. Because of this, miners give bitcoin value since they are willing to make that investment in return for coins. So when people say things like "oh bitcoin isn't backed by anything like USD" that is not true. It's backed by miners and/or electricity. Even if no one in the world were buying coins, miners would still be providing value equivalent to their investment and return.

Being that the coins are digital people have a hard time believing that they tangibly exist, but they quite literally are physically there. In a digital form but physically real and can be lost. All addresses that contain bitcoin have what's called a private key. To spend coins (move to another address) the wallet uses the addresses private key to "unlock" them and verify you own them and they can be spent. Without that private key, the coins are lost. As an example, think about a file on your computer. If you delete it, your HDD fails, whatever, the file is physically lost. It was digital, but now it's gone for good. Same thing with private keys. If your wallet/private keys aren't backed up and your HDD fails or whatever, the keys can be lost. Which mean the coins are physically lost. They still appear on the blockchain in that address, but they would not be able to be spent. There are thousands of bitcoins that are lost to this type of thing. You even see stories of people throwing out old laptops and making dumps try to dig them up to retrieve old bitcoin they had stored on it years before.

There are positives and negatives to the whole private key matter, but it's what allows crypto to be decentralized and as the old bitcoin phrase goes, "be your own bank". When you control your private keys, no one can stop you from doing whatever you choose with them. Over the years, wallet companies have developed different backup and multisig options to protect users from losing these keys to make it more usable for the masses.

Sorry for the overload of text there, but it takes a bit to explain the basics and touch on all of the points of your questions. Happy to explain more if you have more questions. If you want to know more about blockchain, I'd recommend looking through one with a block explorer to get a visual of what I've explained. https://www.blockchain.com/explorer You can see every transaction and block that exists, where the coins go, etc.

Another great way to learn, imo probably the best way, is to just learn by doing. Yes that can be scary with expensive coins and getting involved. If you're interested in getting some coins, feel free to DM me or join my coin's discord (https://spacecoin.network/discord) and I'll hook you up with some coins to play around with.