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by cryptodogemoon 3120 days ago
Funny how this sort of subsidy is how Ponzi schemes were partially inspired by

onzi received a letter from a company in Spain asking about the advertising catalog. Inside the envelope was an international reply coupon (IRC), something which he had never seen before. He asked about the IRC and found a weakness in the system which would, in theory, allow him to make money.

The purpose of the postal reply coupon was to allow someone in one country to send it to a correspondent in another country, who could use it to pay the postage of a reply. IRCs were priced at the cost of postage in the country of purchase, but could be exchanged for stamps to cover the cost of postage in the country where redeemed; if these values were different, there was a potential profit. Inflation after World War I had greatly decreased the cost of postage in Italy expressed in U.S. dollars, so that an IRC could be bought cheaply in Italy and exchanged for U.S. stamps of higher value, which could then be sold. Ponzi claimed that the net profit on these transactions, after expenses and exchange rates, was in excess of 400%. This was a form of arbitrage, or profiting by buying an asset at a lower price in one market and immediately selling it in a market where the price is higher, which is completely legal.[8]

https://en.m.wikipedia.org/wiki/Ponzi