The problem with the idea is that people use BTC to save/hold cash and FRC to do transactions is that if all my savings are in BTC why on earth would I want to convert to FRC before spending them?
We're assuming merchants will accept both and spend FRC first (without converting them). That could result in more value being transferred through frc than through btc. We don't care how much value is being stored in btc compared to frc because frc is not designed to be a store of value: only a medium of excange.
I don't think either btc or frc will ever be good as medium of account (not that it is really necessary for anything), but freicoin will probably be better for that too.
And of course, investors will prefer to borrow frc over borrowing btc as they will be able to find better rates as frc has demurrage and it's not deflationary.
That's the whole point, that investment doesn't stops in "deflationary times" if we can really have that with a free monetary market (historically those monetary cycles occurred under a gold [monopoly] standard).
Think about what you're saying. If Ripple transactions required Bitcoin, then you'd have to wait for at least one confirmation from the Bitcoin network before you could consider a Ripple transaction complete. Furthermore, if the chain containing the Bitcoin part of the Ripple transaction got orphaned, the Ripple transaction would be rolled back. This is completely incompatible with Ripple's ledger system.
This is what happens when people with no technical ability try to pontificate.
The point of XRP is spam prevention. Even if the chain gets orphaned the task at hand, spam prevention, is still accomplished. And of course the actual data would not be contained in the bitcoin blockchain, just some hash or some similar system. Its really not that hard to think of a way this could work. IIRC the clients still store orphaned chains in the blk0001.dat anyways.
I think it's feasible but technically very complex. Besides you lose ledger consensus's improved latency and you become liable to PoW security model in addition of ledger's consensus security model.
I prefer to have two different security models operating in parallel: that makes the crypto-assets community as a whole much more resilient.
