Pardon my ignorance as I try to wrap my head around Ripple, but couldn't it just use BTC instead of XRP?
Not any way that I know of. There's another thread where I solicited suggestions for a way to make that work and nobody came up with any.
Let's not be intellectually dishonest. If there was any real motivation, Ripple could have been designed so that XRPs were produced as the result of proof of work. The XRP production schedule could be set to create 100 billion XRP over the course of 10 years at either a fixed or a decelerating rate, with the target difficulty adjusted to maintain the rate of production.
Good point. It would also have solved the problem of initial distribution, which I still don't know how OpenCoin intends of solving. Just saying "we'll give ripples to everyone" is not very serious, for if XRP gets any monetary value, lots of people will fake identities in order to get as many ripples as possible. Instead of the CPU rule there will be a "cheating" rule.
Or OpenCoin could just bluntly sell ripples to the public, without giving any of them for free or at least not systematically. But such a strategy would not seem compatible with an open-source project, as anyone could sell a similar product as soon as the source code is released.
I think it's a conundrum. It's too bad because I really appreciate what they are doing. We really need a distributed IOU market as it permits the decentralization of the exchange. The software seems very smart and well written but there are a few aspects that seem to not fit together very well.