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I wonder if it would have been possible to win the challenge legitimately? If a randomly-generated file happened to contain some redundancy through sheer chance, you could hand-craft a compressor to take advantage of it. This compressor would not work in general for random data, but it could work for this one particular case. It's a bet worth taking, because the payoff, 50:1 ($5,000 to $100), is pretty good. Play the game 50 times and you might get a file you could compress. The challenge, then, would be for the person offering the bet to generate a really random file that contained no such redundancy. That might not be easy. |
A plausible "decompressor" is at least, say, 30 or 100 bytes, so the random file needs to have 30 bytes less entropy than you expected, which happens with probability X where X << 1/50. Sum over the whole domain of reasonable decompressors, and you still don't get there.
This argument could do with more rigor, but I think it's correct. Give me 100 million to 1 odds, though, and I'll take my chances trying to brute force a compressor.