Suppose you lend me 1 bitcoin and I abscond with it. "But it's in the digital ledger", you cry.
I say, "So? You can't prove the pseudonymous address you sent the coins to belongs to me, and even if you could, you can't make me give 'em back".
Actually you can, by taking me to a court (run by the govt) and sue me under laws passed by the govt.
But if you don't believe in government and won't touch those government-run things like courts and laws with a bargepole, well you ain't ever going to get your coins back...
And what collateral are you putting up for the 1 Bitcoin?
That is what lending is about, collateralization.
There was a banking system that lends trillions of dollars per day without courts or governments. It has been operating for more than 70 years.
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