1. double-spend. It seems ripple uses trust instead of mining to prevent double spend. Even if an IOU is issued by a trustworthy entity, people spending it may not. In contrast, in a colored-bitcoin scheme you only need to trust the IOU issuer, and the rest is protected by mining. If there is a trust-less and decentralized solution without any kind of proof-of-work or proof-or-stake, it would definitly be a bitcoin-killer (but I don't think this could happen).
Think of a room full of people who all agree with each other. To enter the room, you must agree with them. To disagree with them, you must leave the room. They all sit in this room maintaining continuous agreement on everything. Each of them who is honest puts their first priority on enforcing the rules of the room, their second priority on maintaining agreement with everyone who is also willing to follow the rules, and their third priority on accepting legitimate transactions provided they don't violate the first two rules. The rules of the room make it infeasible to agree to a transaction once a conflicting transaction has been agreed to -- such an agreement cannot be formed and be valid according to the rules.
But the room is only so big, there are many other rooms, and you need XRPs to connect them all together. Since there is no built-in bootstrapping mechanism for distributing XRPs the workability of the system is questionable, and I'm having a hard time finding mention of a sensible approach to manual bootstrapping from any of the present room inhabitants. Am I missing something?
As with Freicoin, it seems a step in the wrong direction to go from a working-- if flawed-- example of automated bootstrapping in Bitcoin to an undefined manual one somewhere in the future.
Btw-- wrt:
https://ripple.com/wiki/Distributed_exchange#How_does_Ripple_handle_privacy.3FI'm not sure who wrote "2. Proxy payments" but the word "anonymize" needs to be removed from that paragraph. A system where the recipient _and_ the third-party gateway can reveal the sender provides zero anonymity in any sense of the word. Unless of course you're comfortable saying that using Facebook sometimes and LinkedIn other times anonymizes your online data profile.