it could potentially be used to circumvent an important PayPal fraud-prevention scheme that uses a GIF with numbers and letters
I must say that I find that highly unlikely. Take a look at Paypal registration to see an example of the images generated - even though I am a firm beleiver that anything can be written in perl, eventaully, this really funny little trick isn't coming close to breaking the paypal images. Nor was it intended to, of course. :)
Reading a character in an image is old news as such, so paypal uses a lot of different "blurring" techniques, such as drawing lines at random intervals, moving the characters inside the image and using a font that is hard to interpret - and probably other things too.
Just so any paypal users can sleep a little tonight...
You have moved into a dark place.
It is pitch black. You are likely to be eaten by a grue.
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