The luxury watch market, which appears very conservative, gives an important place to innovation. Thus, in 2010, Richard Mille unveiled the lightest watch ever produced, the RM 027, then Jacob & Co marketed one of the most sophisticated movements in 2014 with the Astronomia Sky, while Hublot, with the Big Bang and , makes the connected watch a luxury item.
However, the process of authenticating a watch remains archaic and unsuitable: faced with the considerable value of luxury watches, how can we conceive that many buyers still rely on paper certificates to certify the authenticity of a Rolex Daytona?
Few individuals know how to recognize a 4130 caliber down to the smallest detail, for the rare times that the replica is not equipped with a simple ETA 7750 movement, or even a Japanese movement such as the Miyota. Of course, having the level of expertise necessary to distinguish a Parachrom hairspring from a simple hairspring, or even to distinguish between Microstella and simple screws is not easy!
So why not use Blockchain technology to revolutionize the authentication process of a watch?
The Blockchain represents a ledger of distributed transactions that improves transparency and traceability. Applied to the watchmaking market, this could act as a guarantee of authenticity by allowing the issuance of a unique, tamper-proof and non-duplicable digital certificate for each watch: once the characteristics have been entered on the Blockchain, it cannot be changed. Furthermore, the issuer of the digital certificate would be in the public domain, which limits the creation of forgeries.
One of the solutions, proposed by Guillaume Kuntz and Marc Ambrus, is the See Certificate, a metal card bearing a QR code referring to the certificate of authenticity registered on the Blockchain. Even luxury houses are trying to fashion the watch “passport” for their new models. Therefore, LVMH is now developing its own Blockchain, while Breitling and Vacheron Constantin rely on Arianee’s technology to develop NFTs associated with their products. Similarly, Kering is working hand-in-hand with French startup Woleet to affiliate any Ulysse Nardin product with a digital passport registered in the Bitcoin Blockchain.
However, such a solution remains fallible because it encounters the limitations of associating a —potentially replicable—physical object with an NFT. In 2020, VIDT Tech created an NFT to guarantee the authenticity of an iconic model, a Milgauss 6541 dating back to 1956. Unfortunately, VIDT Tech is not immune to a Milgauss 6541 replica with 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 the NFT! It would thus become impossible to sell a watch without its NFT or, conversely, to sell the NFT with a watch that does not match 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 replica equipped with an authentic bezel? Actually, nothing… except the cost. The counterfeiter who, until now, produced hundreds of replicas for one hundred euros, will now have to add the cost of an authentic bezel to his production costs! This is enough to discourage him and thus greatly reduce the risk of fraud!
But as well as financially discouraging counterfeiting, this mechanism would also limit the amount of counterfeiting. Indeed, it is now possible to produce multiple replicas for the same watch produced by one watchmaker, because a serial number can be replicated indefinitely. But with such a solution it would be possible to produce a single replica for each watch leaving a watchmaking laboratory, given that the associated NFT is not replicable. This innovation would considerably reduce the number of replicas in circulation, thus limiting fraud (in other words, the maximum would be one counterfeit for an authentic one).
Furthermore, 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. Thus, the digital certificate is an answer to this problem: without a digital certificate registered in the Blockchain, resale would become more difficult or even impossible. In this way, the traceability of the watch would be guaranteed 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, “you never fully own a Patek Philippe. You will only be its keeper for future generations.” It is therefore very rare for a luxury watch to have a single owner during its lifetime and in most cases any watch has a future on the second hand market. Blockchain therefore appears here as the best way for luxury houses to get to know subsequent owners to start a personal relationship with them through digital means and even build a community around the brand. This is enough to lay the foundations for 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 just their sales process. The registration in the Blockchain, in fact, in every phase of the production process, aims to make each intermediary involved in the production chain responsible. It becomes much easier to verify the minimum origin declaration, which significantly limits fraud. In this way, every owner could follow the entire manufacturing process of his watch and finally attest to the too often disputed “made in Switzerland”. It would also become possible to fill in the maintenance booklet in the Blockchain to know the history of each watch and create its digital passport.
Certainly, such an innovation may be related to a desire to better control the used market. However, in the face of the increase in online sales, embodied by the Chrono24 platform, a digital passport would be welcome: in addition to the improvement it would provide in terms of watch authentication, it would guarantee the permanent traceability of the latter and would even allow Blockchain technology from adopt in other sectors.
So, are you finally ready to buy a watch whose certificate is dematerialized?
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