There are 5 types of cryptocurrency loans available on the market:
Margin lending on cryptocurrency exchanges
Collateralized Bitcoin loans
Hybrid crypto/fiat Bitcoin loans
Reputation based Bitcoin loans
Fiat loans with Bitcoin as collateral
It's quite common that many have faced the opportunity cost of holding capital. Having fiat money in cash is all good and well when you are in risk, but when you have no other usage, it will be a loss considering the inflation, and also we all need to let money work for you, but not work whole year for nothing at the end.
Some people solve this by purchasing real estate or stocks and collecting steady income via rent/dividends. For others who don’t want to actually spend their money, business-savvy people “invented” the practice of lending.
With lending, an individual is given the ability to negate the opportunity cost of holding cash in the following way: lender will borrow his money to the borrower, who will guarantee that the money will be returned after a certain period of time, with interest.
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