The Nether is a PvP arena where players everywhere globally are exposed to PvP damage. It features a vast arena where players, regardless of armor, or weapon are equal, so all players have equal advantages when pitted against one another.
Prior to the 1.12 update, all players ranking in top 3 in number of kills were rewarded 1 gold coin.
Soul Points are not lost in the nether, nor are any your items.
All players are equal in terms of damage inflicted, and taken. A player clad in diamond armor as the same defense as someone without armor, and a player with an oak wood stick would inflict equal damage as somone with Bob's Mythic Wand.