The luxury watch market, which seems very conservative, gives an important place to innovation. Richard Mille presented the lightest watch of all time, the RM 027, in 2010, then Jacob & Co launched one of the most sophisticated watch movements with the Astronomia Sky in 2014, while Hublot introduced a luxury watch with the Big Bang and the Connected Watch.
Yet the process of authenticating a watch remains archaic and inadequate: given the considerable value of luxury watches, how can we understand that many buyers still rely on the paper certificate to attest to the authenticity of a Rolex Daytona?
Few people know how to spot a Caliber 4130 in minute detail, for those rare occasions when the replica doesn’t come with a basic ETA 7750 movement, or even a Japanese movement like the Miyota. Of course, it’s not easy to have the expertise to tell a Parachrom IUD from a plain IUD, or even tell the difference between Microstella and plain screws!
So why not use blockchain technology to revolutionize the process of authenticating a watch?
The blockchain represents a ledger of distributed transactions that improves transparency and accountability. Transferred to the watch market, this could serve as a guarantee of authenticity, in that a unique, tamper-proof and non-duplicate digital certificate can be issued for each watch: once features have been entered into the blockchain, they can no longer be changed. Also, the issuer of the digital certificate would be publicly known, limiting the creation of counterfeits.
One of the solutions proposed by Guillaume Kuntz and Marc Ambrus is this view certificate, a metal card that has a QR code attached that links to the certificate of authenticity registered on the blockchain. Luxury houses are also trying to stamp the “passport” of the watch for their new models. As a result, LVMH is now developing its own blockchain, while Breitling and Vacheron Constantin rely on Arianee’s technology to develop NFTs for their products. Similarly, Kering is working hand-in-hand with French startup Woleet to connect each Ulysse Nardin product to a digital passport registered on the Bitcoin blockchain.
Nevertheless, such a solution remains fallible because it hits the limits of associating a—potentially replicable—physical object with an NFT. In 2020, VIDT Tech created an NFT to ensure the authenticity of a legendary model, a 1956 Milgauss 6541. Unfortunately, VIDT Tech is not immune to a Milgauss 6541 replica with the same reference number…
So why not make the NFT and the clock the same entity? By inserting an RFID chip under the bezel insert, the watch itself would become the NFT! It would thus be impossible to sell a watch without its NFT or, conversely, to sell the NFT with a watch that does not correspond to it.
Especially since Hitachi, a Japanese company, is now able to produce RFID microchips that are only 0.4 mm long and wide. You will tell me, but what prevents a counterfeiter from selling a replica with an authentic bezel? Nothing really… except the cost. The counterfeiter, who used to make hundreds of replicas for hundreds of euros, now has to add the cost of an authentic bezel to his production costs! This is enough to deter him and therefore greatly reduce the risk of fraud!
But aside from financially deterring counterfeits, this mechanism would also limit their volume. In fact, it is now possible to have multiple replicas of the same watch made by a watchmaker because a serial number can be replicated endlessly. But with such a solution, a single replica could be made for every watch that comes out of a watch lab, since the associated NFT is not replicable. Such an innovation would significantly reduce the number of replicas in circulation and thus limit fraud (in other words, it would be at most one fake for a real one).
In addition, such an innovation would reduce the number of stolen watches. In Île de France, watch thefts have increased by 31% since the beginning of 2022. Therefore, the digital certificate is an answer to this problem: without a digital certificate registered in the blockchain, resale would be difficult or even impossible. This would ensure the traceability of the watch at all times.
Such traceability would also improve the relationship between houses and customers. Indeed, and as the brand embodied by the spirit of Gérald Genta demonstrates, “a Patek Philippe is never fully owned. They will only preserve it for future generations.” As such, it is very rare for a luxury watch to have a single owner over its lifetime, and in most cases each watch has a future in the pre-owned market. The blockchain then appears here as the best way for luxury houses to get to know the successive owners, to build a personal relationship with them through digital means and even to build a community around the brand. This is enough to lay the foundation for the customer relationship that is so missing in the luxury market!
Finally, at a time when the international sharing of production processes is so important, the use of blockchain technology would also revolutionize the manufacturing process of luxury watches, not just their sales process. In fact, registration in the blockchain at each stage of the production process aims to empower each intermediary involved in the production chain. It becomes much easier to check the slightest declaration of origin, which greatly limits fraud. In this way, every owner could understand the entire manufacturing process of their watch and finally certify the all too often disputed “Made in Switzerland”. It would also be possible to fill in the maintenance book on the blockchain to know the history of each watch and create its digital passport.
Surely such an innovation can be related to the desire to better control the used market. However, given the increase in online sales, embodied by the Chrono24 platform, a digital passport would be welcome: in addition to the improvement related to watch authentication, it would ensure and even allow the permanent traceability of these latest blockchain technology to be adopted in other sectors .
So are you finally ready to buy a watch whose certificate is dematerialized?
All information on our website is published to the best of our knowledge and belief and for general information purposes only. Any action taken by the reader on the basis of information on our website is entirely at your own risk.