Addresses, transactions, active users, flows, labels, entity clustering, and attribution limits.
By the end, you should be able to
- Separate addresses from people or entities.
- Explain common flow and activity metrics.
- Avoid inferring intent from transfers alone.
One transfer, several plausible explanations
An observed flow is evidence of movement—not motive.
The ledger shows state changes
Public networks can expose transactions, addresses, contract calls, balances, fees, and timestamps. Analysts transform those records into methodology-dependent metrics such as active addresses, exchange flows, or realized value.
An address is not a person
One person can control many addresses, and one address can represent an exchange, contract, bridge, or group. Entity labels and clustering are hypotheses supported by evidence, not native blockchain facts.
Movement does not reveal motive
A transfer to an exchange may precede selling, collateral use, custody changes, internal reorganization, or no immediate market action. Combine ledger evidence with market and source context.
What this does not tell you
- Entity labels can be wrong or stale.
- Activity metrics can be inflated by bots, contracts, batching, or address splitting.
- Privacy technologies and off-chain activity reduce visibility.
Separate observation from inference
Analyze a public transaction without assigning identity or motive beyond the evidence.
- Record the transaction, network, timestamp, addresses, assets, and contract calls.
- List labels and the source of each label.
- Write one observed fact, two possible explanations, and what would distinguish them.
Check your understanding
1. Is one address always one person?
2. What does a transfer to an exchange prove?
3. Why can active-address counts mislead?