A conversation with Whale Alert, one of crypto Twitter's most mysterious watchdogs

It is hard to be on Crypto Twitter without noticing Whale Alert. 

With more than 232,000 followers, it is one of the most famous crypto accounts on Twitter. Whale Alert is known for being one of the first heralds of large token movements by particularly rich blockchain addresses — also known as "whales." 

The account's tweets always start with the large figure that has just moved, followed by a token ticker and the approximate dollar value of the tokens. They end by listing the entities associated with these big transactions.

While Whale Alert’s goal is to track addresses that have the ability to move the market, by being the “whale watcher” and broadcasting its observations, the account itself has the power to precipitate market movements too. 

In fact, it may have triggered a bitcoin price drop on May 20, when it was the first to announce a 40 BTC transaction from an address that hadn’t been used since 2009 as possibly belonging to Satoshi. Bitcoin's price tanked from nearly $9,800 to around $9,300 in the hour following the tweet. The episode demonstrated Whale alert’s influence but also invited greater scrutiny from the community.

Besides tweeting its findings, Whale Alert sells data to both professional and amateur traders. 

The Block reached out to the team behind Whale Alert to learn more about its history, the role it plays in the crypto ecosystem and its future plans. 

Can you share the history of Whale Alert? 

We started trading crypto in early 2017 right before the big craze. We noticed there was a lack of tools for trading and with us being developers, we decided to create some of our own.  

Our first tool was a social media monitor that tracked Youtube and Reddit for posts on coins and that actually worked for predicting prices going up, but we were not able to predict when prices would drop. That is when we created the first version of Whale Alert, which was a simple BTC and ETH tracker, nowhere near as complex as Whale Alert is right now, but it allowed us to explain some of the biggest drops we saw. 

Right before the big drop at the beginning of 2018, we noticed some really big ETH transfers from the EOS team and that is when the market went down fast. We stopped trading around that time and a few months later we noticed our first version of Whale Alert was still running. Instead of shutting it down, we decided to share it with the community and it was a big hit.  

The Whale Alert account is pretty influential on Crypto Twitter and one could argue that some of its alerts have an impact on the market given how intensely the trading community focuses on it. Did you expect it to be so popular? 

At first, we thought Whale Alert would be popular among experienced traders, but it turned out that our audience is much broader. The role we fulfill is different than we first expected and right now we function as a sort of watchdog as well as being a data supplier. We see everything that happens on the blockchain and that gives people a sense of security I think.

Whale Alert’s Satoshi Tweet was pretty controversial and likely even played a role in the price drop on May 20. Can you walk us through why the team decided to note that it is “possible Satoshi owned wallet?”

We will be releasing an article in the near future about our views on Satoshi. It is a very laden subject in the community and we wanted to make sure when we made the post that we made no definite prediction about who the owner was. That is why we said "possible." We do not feel that the currently available research excludes the possibility of the address being owned by Satoshi and we think it is something that should not be discounted.

There is an ongoing debate in the industry surrounding the value of the transparency of the blockchain versus the need for privacy in transactions. Whale Alert sits on this very fine line. What are your thoughts on the balance of privacy versus information transparency?  

Again a very dividing subject, but I think people need to realize that privacy is already a very rare commodity with companies like Facebook and Google collecting everything they can. Privacy tends to be on the side of the rich and powerful in our current economic system, which was proven by the Panama papers and one of the things that Whale Alert aims to do is remove the advantage they (such as Jed McCaleb) have over the average user, something that we feel is needed for large scale adoption. Also, compared to traditional payment methods, like bank transfers, credit cards and PayPal, it is much harder to track individuals in blockchains. Larger players such as exchanges are relatively easy to identify and track and they even benefit from the added transparency as it generates trust. That is why a lot of exchanges actively work with us to improve our reporting.

Are there any future product ideas your team wants to explore? 

We have a ton of ideas, some of which we are very excited about. With Whale Alert we have many cool ways we can help improve blockchains and help protect the community. We are currently working on a new and improved Whale Alert analytics system, a huge project, and we will be launching a new website and analytics system built on top of it this week. We are very excited about the future of blockchain, but we see some shortcomings that hinder adoption and we think that we can play an important role in fixing those problems.

There are two major shortcomings: the lack of transparency and a focus on getting rich, which has drawn a lot of people to the blockchain. For adoption, we need to show people that blockchain is more than a get rich quick scheme and that it is actually being used and safe to use. I think we have already contributed a lot to that, but there is more work to be done. Blockchain still has a bad reputation as something that is used in crime and that is something we are going to tackle next.