What would you take a loan out with?
Discussion
I wouldn't. Loans shouldn't be common.
How about for a used car or home improvement or braces for your child etc. A personal signature loan or uncollateralized loan has high interest rates. Home equity rates are better but you put your house as collateral.
Personally I’m waiting for the market to mature and lending rates to fall significantly before even considering a loan against my bitcoin. Even then only for emergency. Worst case is to pay interest only and roll the loan at maturity. After a while repay with a fraction of the collateral you pledged.
Interested in the answer. If it's credit, that has to be paid back in fiat and if you're in a Bitcoin Standard (you don't have fiat) that means selling and a taxable event unless you're paying back with every paycheck which is a huge dip to any daily liquidity you might have to buy stuff like normal and not feasible. If you have a bunch of cash laying around to pay the loan back we'll... Then maybe it makes sense. For now bitcoin backed loans still barely compete with a personal loan if you have good credit. If you don't have good credit well... And I assume Bitcoin will be the presine collateral and in the future fetch a much lower rate.