Why is mining which seems to be a software activity create bitcoins which is actually equal to currency? I cant get around the fact that bitcoins are "created" by "mining", which seems to be software/computation activity.
In the non-bit world, we always convert one form of value into another, like wood, gold, oil, effort to make things out of these ... looks like mining is creating bitcoins,  why is a value in hard currency attached to mining which translates to bitcoin ? but if no one wanted  the mined bitcoin, wouldnt it become useless  

Isnt it like saying , dollars are hidden in a packet , if you can open the packet you get dollars .... but such dollars cant come out of thin air, someone used something to create the dollars that he put inside the packet. What is the source of truth of bitcoin, how did bitcoin come into existence without backing from hard currency ???
The purpose of mining is not the creation of new bitcoin, this is the incentive system. Mining secures the bitcoin system and enables the emergence of network wide consensus without a central authority. Miners receive two types of rewards in return for the security provided by mining: new coins created with each new block and transaction fees from all the transactions in the block. There is an exchange of value because in exchange for the security they provide and the computing power they expend, miners get bitcoins which is a valid trade. Similarly in the early days of bitcoin Satoshi Nakomoto sent bitcoin to his peers in exchange for them testing or developing bitcoin core, this again is an exchange of value. Once the darknet got involved in bitcoin they used it because of its anonymity and security, it was valuable to them because of these reasons and this is where demand for bitcoin started and because of this the value of it increased. So the fact the people are willing to exchange valuable things like electricity, computing power, software and testing skills for bitcoin gives it value.