I love your way of thinking. Assuming proper waterproofing, hiding it underwater would be the most unexpected thing you could do. I'm a smart guy and that thought hadn't occurred to me, even if I only dedicated 3 minutes of my time to the process. The majority of people would naturally assume it's on land; to place it in the water automatically ruins the consensus assumption.
Weird. This is the very first thing I thought of. That, or properly secured way up in a huge tree. How many people are looking up, right? Although, the tree thing doesn't fit with his ability as a ~80 year old to put it up there.
I believe the reason my mind first went here is because of Star Trek II: The Wrath of Kahn - in the climax of the film Spock analyzes Kahn's movements and informs Kirk, "his pattern suggests two dimensional thinking."
You also have to account for wildlife and weather. You wouldn't want a big blow or a bear to knock your chest down and scatter the contents. But you're correct that most people don't look in all directions when they walk.
Underwater was actually the first thing I thought of. Why a bronze chest, after all? Gold doesn't corrode, and bronze doesn't float.
I recall tales of WW2 military units tasked with cleverly camouflaging things. Technology has progressed. You can now take a photograph of terrain and print that exact photo onto a cloth which can then be epoxied over a fiberglass form and decorated with local surface features.
So I could make a fake fiberglass rock large enough to cover a 10" cube, perfectly camouflage it with a custom print shop order and about $80 in supplies, and anchor it to the ground. You might not realize it was a treasure cache even if you tripped and landed with your face one meter away from it. But that's not necessary if you just control sight lines.
Those are interesting ideas, but those kinds of techniques would violate the spirit of the deal. By creating such a large search area, he tacitly agrees to not hide the box itself too well.
"The deal", as I see it, is to find the treasure by solving the riddles and clues, not by stumbling across it by chance.
If the clues were sufficient to pinpoint the location with 1m precision, it would be acceptable to hide something so well that you would have to be within 1m to notice it. A buried treasure would require this magnitude of precision.
If the clues give 10m precision, I'd expect that the target should blend in a bit, but still be detectable from 3m away. A buried or submerged treasure marked with an obvious blaze could get away with this magnitude.
At 100m precision, you actually need to be sort of obvious. At 1km precision, it should be painted hunters orange and shoot fireballs into the air periodically. At 10km precision... you probably should have taken some of that treasure and hired Will Shortz or some other professional puzzlemaster as a consultant.
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