Importance of Tracking Transfers : Interview with Frank from Whale Alert ③

In 3rd part of Whale Alert interview series, Frank is talking about how influencers on Youtube have a big impact on crypto, which is true for back the days, and even more so now. It is also very important to know that they don’t track people. Please read to more know more about who they track and the influence that Youtube has.

(Frank : Co-Founder at Whale Alert)

Interview Date :13th February 2020

Importance of tracking transfers

We wanted to explain some of the volatility of the market. We were able to explain some of what was happening with our tracking system. For instance, back in 2017 some of the really large drops corresponded with large Mt. Gox transfers that we tracked. We noticed that the price dropped right after these kinds of big transfers. One of the most interesting things during that time was the EOS team transferring their ETH to exchanges. Our tracker picked up the huge movements and shortly after, the price of ETH started to drop very fast. There were a lot of theories floating around on what caused the drop, but we knew what was actually happening.

We can see any transfer made on non-privacy blockchains and people move their Bitcoin or Ethereum for a reason. One of these reasons is to sell or trade. If there is a lot of people selling, there’s got to be a lot of people sending. This might not be the case for everybody and for every single person, because a lot of people already have their assets in exchanges, but in most cases it turned out to be true.

There are several types of account holders and asset holders. Right now we differentiate between exchanges, hackers・scammers, ICO’s and companies, like Ripple. We do not track individuals (aside from some whales who are involved with the creation of a blockchain). The whole process of determining an owner (sender or receiver) is quite complex and involves a lot of math, research and data and is different for every blockchain.

There are a lot of differences between blockchains, but for us the most important difference is the way the transactions are structured. Blockchains like Bitcoin can have multiple inputs and outputs, making it harder to figure out where the coins came from and are going to. Blockchains like Ripple, Ethereum and EOS are much simpler, because they have “one in” and “one out” in most cases. Bitcoin and Ethereum remain the most popular blockchains in terms of holders and transaction frequency, with some other blockchains being hardly used.

Increase of transfers through side-chain

We have chosen not to explicitly track or report on side-chain transactions, but we do report transactions, like the USDT token swaps that we have seen a lot of that are part of side-chains. This means that we will report tokens being locked or burned on one chain and tokens being unlocked or minted on the other (Like USDT swapping from Ethereum to TRON). One of the reasons why we don’t combine these transactions, is that it might not always be 100% certain that two transactions are connected (with USDT swaps these transactions can be days apart). We do use these type of side-chain transactions to attribute addresses to specific users across chains though. 

Influence of Youtube on Cryptocurrency

There were a few famous YouTubers that were really influential, followed by tens and thousands of people. We noticed in early 2017 that these YouTubers had a very strong influence on prices. We created a warning systems for whenever they started talking about any cryptocurrencies. This worked really well. The best way to describe this period is “crazy” as a lot of people made and lost a lot of money and unfortunately it gave people a very bad impression of blockchain when it all crashed.

Differences between Countries

If we think about how do countries like Japan, America and Malta differ in structure regarding crypto, then my idea is it is due to the difference acceptance to new ideas and technologies regarding the market. More than here in the Netherlands, I think countries like Japan are a little more progressive about it.  Also, the Koreans, they seems a little more risk-taking in the sense of cryptocurrency, they don’t mind the idea that they might lose their investment into it which is a good thing. But here in the Netherlands, people are a little more conservative with their money and don’t like to take risks with their money. They also are a little skeptical about looking at new ideas. They rather think “let’s wait a little and lets see what happens”. But then it might be too late.


Interviewer , Editor : Lina Kamada


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