But then you aren't really borrowing/loaning bitcoins. The transaction is taking place in whatever currency you're agreeing to pay it back as. Say currently 1

But then you aren't really borrowing/loaning bitcoins. The transaction is taking place in whatever currency you're agreeing to pay it back as. Say currently 10bitcoins = 1oz gold. So I agree to loan you 10bitcoins, and you agree to pay me back their equivalent price of 1oz of gold +interest in 5 years in bitcoins. The loan is being taken out based on gold, and bitcoins are just an intermediary, but they are essentially acting as a certificate for that gold.