As a basic principle, I'm against debt and lending. Debt is one of the ways that governments and banks enslave the population. However, there are some instances where a loan can be beneficial - starting a new business for example, as long as it is profitable of course. Borrowing Bitcoin is fraught with danger, and lending it is not much better. Both the borrower and lender have to decide if repayment is to be made in Bitcoin or fiat, and extreme price volatility turns this into a major factor.

So why should you borrow Bitcoin? There aren't many businesses that can be funded in Bitcoin, and generate Bitcoin revenue. Those that are able to do so, can probably be funded with a share issue, and this is a safer option for both parties. Another reason is because you believe that Bitcoin will drop in value. You sell the Bitcoin, and repurchase it when the price is lower. The name for a person who does this is "an uncovered bear", and because you are uncovered, you face unlimited potential losses.

Why would you lend Bitcoin if the market is likely to rise or drop? If you are a long term holder of Bitcoin then the price doesn't really matter until you decide to sell. Leaving your Bitcoin on the blockchain does not produce any revenue, and you may want to gain a bit of interest. However, you have to ensure that you will eventually receive repayment. Failure to take reasonable precautions will leave you in the same position as the bankrupt fiat banks.

There is another possibility.  You can place your Bitcoin in a transaction, and use this as a security for a loan, or a service such as escrow. When the security is no longer required, you can reclaim your coins.

My attitude is to leave my coins alone on the blockchain, and not borrow anything. Am I missing some revenue opportunities?