For as long as there have been sailors on the oceans, singing shanties and saying pirate stuff about enjoying rum, there have been sightings of strange and fantastic creatures – from krakens to sea serpents and mermaids.
Reports of the Kraken – a deadly, gigantic monster that had a rather inconvenient hankering for human flesh – go all the way back to 1180, when King Sverre of Norway wrote of a sea monster. Before long, sailors claimed that the beasts were the size of an island, attacked ships with their colossal arms, and, as the legend evolved, able to sink whole ships by creating a gigantic whirlpool that could drag whole ships to the bottom of the ocean.
This particular monster can most likely be explained by sightings of giant squid.
For other creatures – specifically, sightings of sea serpents – the mystery can't be solved without taking a good long look at whale stiffies.
In a famous early sighting of one such sea serpent, Danish Lutheran missionary Hans Egede wrote that on 6 July 1734, he and those aboard his ship had seen "a most terrible creature, resembling nothing they saw before. The monster lifted its head so high that it seemed to be higher than the crow's nest on the mainmast. The head was small and the body short and wrinkled. The unknown creature was using giant fins which propelled it through the water. Later the sailors saw its tail as well. The monster was longer than our whole ship".
In the accounts, the creatures were described as serpentlike and drawn as such.

Ig Nobel prize-winner Charles Paxton took a look at this and other sightings of sea serpents back in 2005, for possible explanations of the accounts. They concluded - with comparisons to modern photographs and descriptions - that several of the accounts were actually of whale boners.
"A more serious objection to a cetacean is that the rear of the animal was described and drawn as serpent-like. Although whales are found, and can survive, without flukes, serpent-like or eel-like bodies are not usually associated with the rapid thrust that would be required to rear the whole body high out of the water," he and several other authors wrote in Archives of Natural History.
"However, there is an alternative explanation for the serpent-like tail. Many of the large baleen whales have long, snake-like penises. If the animal did indeed fall on its back then its ventral surface would have been uppermost and, if the whale was aroused, the usually retracted penis would have been visible. The penises of the North Atlantic right whale and (Pacific) grey whale can be at least 1.8 metres long, and 1.7 metres long respectively, and could be taken by a naïve witness for a tail."
"That the tail was seen at one point a ship’s length from the body suggests the presence of more than one male whale."
A separate incident that could more conclusively be accounted for by a big old whale erection, sailors aboard the merchant vessel Pauline in 1875 saw a sea serpent they described as a "whitish pillar". This particular serpent was seen in the midst of a pod of sperm whales, which at the time were "frantic with excitement".