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It's pretty easy to deal with competitions without belt ranks. Here are some examples:
Judo does it based on classes. There are low class local competitions for guys who aren't that good, regional competitions, national competitions, international competitions, and the Olympics at the highest end. Pretty much everyone gets a shodan after a little bit of time (at least under the Japanese model), but the tiered competition system separates the elite competitors from the local guys.
An art like Muay Thai does it based on the level of fights you take. There are amateur fights for newer guys, and there are professional fights for higher level guys. Within each grouping you can also be a low level local fighter, a regional champion, a national champion, or you can go travel to Thailand and fight the best.
There are a lot of other examples too, but those are just a few to get you started.
I don't know... I think I can be black belt in BJJ someday, but I don't think I could ever become MASTER OF SPORTS in BJJ. Although it would take away the (lack of) meaning of my white belt, so it might be a good idea after all!