One can determine their own rate of interest. I mean, I could lend you 500 sheep and request 500 sheep + 10% per annum for each year you hold my flock. If you

One can determine their own rate of interest. I mean, I could lend you 500 sheep and request 500 sheep + 10% per annum for each year you hold my flock. If you held for 1 year, it would be 550 owed. 2 years, 605. 3 years, 665. With sheep, you might approach this by breeding them with the aim to produce more sheep than are owed, or selling the wool to buy more sheep or whatever. However, we could also do this with a scarce and inorganic resource such as palladium ingots. In this case there can still be interest but you would have to exchange other resources in order to acquire more palladium to pay back the loan. It is still functional provided the market for palladium has good liquidity. EDIT: for more clarity, you could borrow bitcoin with a bitcoin-interest component in order to acquire an asset. Then if you could get paid a salary in bitcoin as well, you would be able to pay the loan back.