The debate regarding the concept of zero-sum game in Bitcoin has resurfaced. The principles of profit and loss in crypto trading have also emerged.
The debate about the zero-sum game in Bitcoin emerged after young Indonesian investor, Sulianto Indria Putra, stated that Bitcoin is a zero-sum in the context of finance and investment.
In his Instagram account, Sulianto argues that the profits gained by Bitcoin holders occur at the expense of asset owners in fiat or conventional money.
This viewpoint is indeed rooted in the historical birth that emerged as a form of resistance against the imperfections of the traditional financial system.
So what exactly is the concept of zero-sum game in Bitcoin?
In economics, a zero-sum game is a situation where one party's gain is equivalent to another party's loss. In other words, the total value contested remains constant. If someone gains 10 million rupiah, then the other party must lose the same amount.
This concept often applies to speculative activities, including Bitcoin trading and investment. When you buy Bitcoin hoping its price will rise, there is another party selling it because they believe the price will not rise again. In this case, your profit is directly proportional to the losses of the other party.
The simplest analogy is that in front of you is a cake. If someone takes a large piece, the other person must be satisfied with a smaller piece. The total amount of cake does not change, it just changes hands.
Bitcoin Trading Is a Zero-Sum Game
If Bitcoin is viewed purely as a short-term trading instrument, it indeed shows zero-sum characteristics. Price movements occur due to buying and selling actions by market participants.
Gains come from favorable price changes, while losses arise from opposing movements.
In derivative trading such as futures or margin trading, this zero-sum effect is even stronger because there is no exchange of real assets; only the price difference is at stake.
For example: if the price of Bitcoin drops and you manage to sell at a high price before the fall, you will profit. But the party that bought at that high price will incur losses.
Bitcoin More Than Just a Trading Tool
Although trading activities exhibit zero-sum characteristics, Bitcoin is not merely a speculative instrument. Essentially, Bitcoin is designed as a decentralized alternative to the traditional financial system. The blockchain technology behind it provides benefits such as secure, transparent, and efficient transactions without intermediaries.
As adoption increases, Bitcoin begins to be used in various real scenarios, such as:
Faster and cheaper cross-border transfers compared to traditional systems.
Venezuela, Ukraine, and the Philippines have adapted Bitcoin as a cross-border transfer system.Protection against inflation in countries with weak currencies.
People in countries like Venezuela or Turkey use it as a hedge against inflation.As a store of value often referred to as "digital gold"
From this perspective, the Bitcoin ecosystem can be seen as a positive-sum game that benefits more than one party. The technology and innovation behind it provide broad benefits, even for the general public. $BTC
