In the late 1700s, a Frenchman named Claude Chappe3 invented a visual telegraph that used semaphore towers spaced 10 to 15 kilometers apart. With a telescope, e

In the late 1700s, a Frenchman named Claude Chappe3 invented a visual telegraph that used semaphore towers spaced 10 to 15 kilometers apart. With a telescope, each station could see neighboring towers and relay their semaphore positions to the destination. In a world where long-distance communication was via horse-carried letters, Chappe's telegraph was a wonder. Signals from Paris were received in Lille, where the first stations were built (about 218 kilometers or 136 miles apart), after only a few minutes. The network soon spread to Brest, Toulon, Strasbourg, and later even across the English Channel. Semaphore positions were defined in a codebook allowing a variety of messages to be sent. The well-crafted codebook provided easily recognizable semaphore patterns for common symbols, as well as error-correction codes that allowed a proper message to emerge despite errors in transmission or reception. The Chappe network was in continuous use for more than 60 years. An electrical telegraph network supplanted it once the technology of long-distance insulated wires made that invention practical. For our purposes, though, the most interesting aspect of the Chappe network came about in 1836 with the discovery that stock market information was being relayed across the network, buried in other messages, by means of what we now might call steganography. The semaphore operators were paid to introduce certain errors in the messages of various customers. Because of the error-correction codes the messages arrived intact, but if someone was privy to the raw symbols transmitted, the introduced errors contained a message that provided an advantage in buying or selling stocks. TIL 1830s European stock traders were already into latency arbitrage using an early form of surreptitious DSL over optical telegraphs...