A watch’s “life story” can make or break its resale value: Is the timepiece an authentic model or a forgery? Who were the previous owners? Is it intact or have original parts been replaced? Has it been serviced regularly and, if so, by whom?
The conscientious owner may have the watch’s certificate of origin, bearing its serial number, and service records, but if the watch has been handed from one generation to the next or sold several times, the paper trail is often incomplete or missing entirely.
What can watchmakers do? Some are examining blockchain, the distributed ledger system that has underpinned cryptocurrencies since 2009. While that sounds complicated, it actually just involves recording information permanently on a database, shared by more than one computer, that can be retrieved, but not changed, by authorized people.
Since 2016 Favre-Leuba, said to be the second-oldest Swiss brand after Blancpain, has been creating digital files called tokens through the WISeAuthentic blockchain platform. The tokens include authentication and warranty information, and allow service information to be stored. A few watchmakers, including Hublot, Franck Muller and Chronoswiss, already have accepted cryptocurrencies, and therefore blockchain, as payment for specific new models.
And in June Vacheron Constantin, the Richemont-owned watchmaker, became one of the first watch brands to test an existing collection on blockchain, using Arianee, a digital certification platform for luxury products with headquarters in Paris.
Audemars Piguet and MB & F, privately owned brands, confirmed that they had become platform members, too, though neither would say how they intended to participate.
Vacheron Constantin’s test has focused on Les Collectionneurs, a small collection of vintage watches that the brand restored and has been reselling.
“The volume is not huge, and it is the perfect collection for us to pilot with,” Angela Au-Yeung, Vacheron Constantin’s chief digital officer, wrote in an email, “so that we can manage the process with precision and to ensure we can collect qualitative feedback directly from our clients.”
A small number of limited-edition pieces also were included, she said, describing the test as being done “on a case-by-case basis.”
For each watch, a set of information, including a certificate of authentication, has been digitalized and placed on the Arianee platform. Buyers also get a traditional paper certificate, but they can access the digital version, called a nonfungible token or e-passport in blockchain terms, through a QR code and store it in a secure wallet on a smartphone.
“We are constantly upgrading the wallet and the content shared through it,” Mrs. Au-Yeung said. “The possibilities are infinite. For the pilot, we started with the most critical information and, on top, some interesting facts about these special vintage pieces. We have plans to enhance the content, going beyond the focus on the specific piece, including the maison, the collection, the people behind it, et cetera, to make it increasingly relevant and meaningful to the clients.”
Thibault Verdonckt, MB & F’s international sales director, wrote in an email that he believed the system was a solution for the pre-owned market, where, “more than ever, trust in the timepiece is key. A digital certificate will help buyers get information about the piece they are about to buy, and sellers will be able to increase the value of their timepieces.”
Paul Boutros, head of watches, Americas, at the auction house Phillips, said in a phone interview that Vacheron Constantin’s test was a small, but important, step toward improving the authentication of secondhand watches and, ultimately, clients’ confidence about what they were buying.
From his perspective, he said, he would like such records to include the production date; location of the first sale, the watch’s original configuration, including the case metal, dial style and movement; high-resolution photographs; and service records.
Skeptics about the use of blockchain for watches are concerned about privacy and how brands will reconcile the digital product with the physical one. But Pierre Nicolas Hurstel, chief executive of Arianee, said cryptography guaranteed the anonymity of whomever holds the token, “The platform is private by design, we never know, and there’s no way for us knowing who owns the passport.”
At Vacheron Constantin, a watch’s engraved serial number appears on the paper and the digital certificates. But, Mr. Hurstel said, a brand also could decide to link its physical and digital product differently.
“We will soon launch N.F.C. chips as well,” he said, referring to near-field communication. “In that case, the chip is inside the product, and you scan the product with your phone, which activates the certificate,” adding that a wine and spirits brand and a footwear brand on the platform plan to use that method.
For Mr. Boutros, the real challenge for blockchain will be getting owners to use it consistently: “Will the collector who bought it continue to update it on the blockchain? I think it will require some education for the potential buyers to keep the integrity of the watch’s provenance and be disciplined in updating the blockchain with future service or future sales.”
Arianne is not the only platform focused on authentication solutions for the luxury industry. LVMH Moët Hennessy Louis Vuitton has said it is developing its own blockchain protocol, called Aura, in collaboration with Microsoft and the technology company ConsenSys. LVMH has said the project will begin by authenticating Louis Vuitton goods and Dior perfume, but it refused to comment when asked when the project would begin.