I wouldn't have been surprised if they had known about the 'flaw', but didn't mind it, because, as Srivastava said "it wasn't worth the time to abuse the flaw". In similar vein, I once randomly generated 2 million out of 40 million possible codes. Consumers would buy products, obtain a code and it would allow them to 'buy one, get one free' for some other product. The code being short and without the usual mixup candidates (I, 1, O, 0, etc.) was much more important than people 'cracking' the system. Even at half the price, the other product still sold at a profit and nobody saw room for mass purchase/reselling.
Of course, later in the article it appeared that people were abusing cracks in the system and reaping the benefits, so it doesn't apply to this case. I just wanted to note that sometimes business concerns trump all actually interesting parts of a problem :/
It wasn't economical for the statistician, since he was making more than he could possibly make doing this. It would likely be economical for many other people, however.
He said he could make $600/day doing this. Even if you only do this 5 days a week and give yourself 2 weeks of vacation, you still end up making $150,000/yr ($600/day * 50 weeks/yr * 5 days/week). That's well above the national average for both the US and Canada.
Another key advantage is tax arbitrage. If you can make $800/day, that's because you have a certain skill set, you can't send a random college student in your place to collect your earnings for one month and pay almost no taxes. You have to pay your taxes on one $150k income.
With progressive taxation, if you get 12 students to redeem 1/12th of your winnings (for say 5%), you're paying taxes at the lowest level (likely even 0%) rather than the 35+% you would be if you had to claim 150k on a single tax return.
Comments
I wouldn't have been surprised if they had known about the 'flaw', but didn't mind it, because, as Srivastava said "it wasn't worth the time to abuse the flaw". In similar vein, I once randomly generated 2 million out of 40 million possible codes. Consumers would buy products, obtain a code and it would allow them to 'buy one, get one free' for some other product. The code being short and without the usual mixup candidates (I, 1, O, 0, etc.) was much more important than people 'cracking' the system. Even at half the price, the other product still sold at a profit and nobody saw room for mass purchase/reselling.
Of course, later in the article it appeared that people were abusing cracks in the system and reaping the benefits, so it doesn't apply to this case. I just wanted to note that sometimes business concerns trump all actually interesting parts of a problem :/
It wasn't economical for the statistician, since he was making more than he could possibly make doing this. It would likely be economical for many other people, however.
He said he could make $600/day doing this. Even if you only do this 5 days a week and give yourself 2 weeks of vacation, you still end up making $150,000/yr ($600/day * 50 weeks/yr * 5 days/week). That's well above the national average for both the US and Canada.
Another key advantage is tax arbitrage. If you can make $800/day, that's because you have a certain skill set, you can't send a random college student in your place to collect your earnings for one month and pay almost no taxes. You have to pay your taxes on one $150k income.
With progressive taxation, if you get 12 students to redeem 1/12th of your winnings (for say 5%), you're paying taxes at the lowest level (likely even 0%) rather than the 35+% you would be if you had to claim 150k on a single tax return.