The luxury watch market, which seems to be very conservative, gives an important place to innovation. Thus, in 2010, Richard Mille unveiled the lightest watch ever produced, the RM 027, then Vacheron Constantin unveiled in 2015 the reference 57260, the world’s most complicated mechanical watch with 57 complications, while Hublot, with the Big Bang e, makes . look related to a luxury item.
However, the process of authenticating a watch remains archaic and inconvenient: in the face of the considerable value of luxury watches, how can we think that many buyers still rely on the paper certificate to prove the authenticity of a Rolex Daytona?
Few individuals know how to know a caliber 4130 down to the smallest details, for the rare occasions when the copy is not equipped with a simple ETA 7750 movement, or even a Japanese movement like Miyota. Of course, having the level of expertise required to distinguish a Parachrom hairpin from a simple spring, or even to tell the difference between a Paraflex and an Incabloc is not easy!
So why not use Blockchain technology to revolutionize the process of authenticating a watch?
Blockchain represents a distributed ledger of transactions that improves transparency and traceability. Applied to the watchmaking market, this can act as a guarantee of authenticity by allowing a unique, immutable and non-duplicate digital certificate to be issued for each watch: once the features are entered into the Blockchain, it cannot be changed . In addition, the issuer of the digital certificate would be publicly known, which limits the creation of forgeries.
One of the solutions, proposed by Guillaume Kuntz and Marc Ambrus, is the Watch Certificate, a metal card attached to a QR code that refers to the certificate of authenticity registered on the Blockchain. Even luxury houses are looking to shape the “passport” of the watch for their new models. Thus, LVMH is now developing its own Blockchain, while Breitling and Vacheron Constantin trust Arianee’s technology to develop NFTs linked to their products. Similarly, Kering is working hand-in-hand with French startup Woleet to link every Ulysse Nardin product to a digital passport registered on the Bitcoin Blockchain.
However, such a solution remains flawed because it conflicts with the limits of linking a physical object—potentially reproducible—to an NFT. In 2020, VIDT Tech created an NFT to ensure the authenticity of an iconic model, a Milgauss 6541 dating back to 1956. Unfortunately, VIDT Tech is not immune to a replica Milgauss 6541 bearing the same reference number…
So why not make the NFT and the watch the same entity? By inserting an RFID chip under the bezel insert, the watch itself would become an NFT! Thus it would become 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 today, Hitachi, a Japanese company, is able to produce RFID microchips, only 0.4 mm in length and width. You will tell me, but what prevents a counterfeiter from selling a copy equipped with an authentic frame? To be honest, nothing… except the cost. The counterfeiter who until now produced hundreds of copies for a hundred euros will now have to add to his production costs the cost of an authentic frame! This is enough to discourage him and significantly reduce the risk of fraud!
Another way would be to integrate the NFT into the sapphire crystal: that’s it STISa Swiss company that markets sapphire crystals for watches, with an NFC chip built into the crystal.
But in addition to financially discouraging counterfeiting, this mechanism would also limit its quantity. Indeed, it is now possible to create multiple copies of the same watch produced by a watchmaker, because a serial number can be repeated indefinitely. For example, a counterfeiter can create an infinite number of copies bearing the serial number 2R42F985 by simply engraving it on the watch. But with such a solution, only one copy can be made for each watch issued by a watchmaking laboratory, since the associated NFT cannot be replicated as an engraving. Such an innovation would significantly reduce the number of copies in circulation and thus limit fraud: the forger could only create one forgery for each serial number issued by a watchmaker’s laboratory.
Moreover, such an innovation would reduce the number of thefts of stolen watches. In Île de France, watch thefts have increased by 31% since the beginning of 2022. The digital certificate is therefore an answer to this problem: without a digital certificate registered on the Blockchain, resale would become more difficult or even impossible. By doing so, watch traceability will be ensured at all times.
Such traceability would also improve relationships between houses and customers. Indeed, and as exemplified by the brand embodied by the spirit of Gérald Genta, “you will never fully own a Patek Philippe. You will only be its guardian for generations to come.” It is therefore very rare for a luxury watch to have a single owner in its lifetime, and in most cases, every watch has a future on the second-hand market.
Blockchain then emerges here as the best way for luxury houses to get to know successive owners in order to start a personal relationship with them through digital means and even create a community around the brand. This is enough to lay the foundations of the relationship with the customer that is so lacking in the luxury market!
Finally, in an era where the international division of production processes is so important, the use of Blockchain technology would also revolutionize the production process of luxury watches, and not only the process of selling them. Indeed, Blockchain registration, at every stage of the production process, aims to empower every intermediary involved in the production chain. It is much easier to check the smallest statement of origin, which greatly limits fraud. Thus, each owner will be able to follow the entire production process of his watch and ultimately testify to the much-discussed “Swiss-made”. It would also become possible to complete the maintenance book on the Blockchain to know the history of each watch and create its digital passport.
Of course, such innovation can be related to the desire to better control the second-hand market. But in the face of the growth of online sales, embodied by the Chrono24 platform, a digital passport would be welcome: in addition to the improvement it would offer in terms of time authentication, it would ensure permanent traceability of the latter and even would allow Blockchain Technology to be adopted in other sectors.
So are you finally ready to buy a watch whose certificate is dematerialized?
through Eytan ABEKASI