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Arthur T Knackerbracket has found the following story:

[...] Paul Erdős, became perhaps the most notorious mathematician of the 20th century. Erdős spent nearly his entire life crashing on other mathematicians' couches and subsisting on the small sums he received for giving talks at universities around the world. He also had a fondness for devising math problems and offering bounties to anyone who could solve them.

"Over the years it was kind of a habit he had to say, 'Here's a nice problem, I thought about it for a while, and I don't see how to solve it. Maybe it's a $25 problem or possibly a $100 problem,'" said Ronald Graham, a mathematician at the University of California, San Diego, and a longtime friend of Erdős's.

In offering small prizes, Erdős was continuing a tradition that flourished in Poland in the early 20th century in cafés where young mathematicians gathered to match wits and push against the frontiers of mathematics.

[...] In that culture, it was also common for mathematicians to back a newly posed problem with a prize — a bottle of wine or a nice meal to whoever could pull the sword from the stone.

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