Tell me who you associate with and I’ll tell you who you are. -Johann Wolfgang von Goethe
The luxury watch industry depends a lot on credibility. The belief in superior quality is without a doubt the main reason why people are willing to give four-, five- or six-figure sums of money to buy a watch. If the buying public begins to doubt the quality requirements of a brand due to loss of credibility, the future of the brand is in serious doubt.
For these reasons, I have seen with some anxiety as various watch brands have started to enter the cryptocurrency / blockchain / non-fungible token (NFT) world. This room is highly specialized in skills not normally associated with traditional watchmaking. A round is not very useful when, for example, trying to evaluate a particular public key encryption standard (and vice versa). For this reason, the entry of watchmaking into the crypto area almost always involves partnership with another person or organization already active in this space.
And this is where the industry is in danger.
Loyalty of cryptocurrency and NFT community
There is widespread fraud and intrigue in the cryptocurrency and NFT community. In a recent interview with Bloomberg, a cryptocurrency entrepreneur with an estimated net worth of $ 24 billion explained a budding cryptocurrency mode called “agricultural yield. “The interviewer concluded that it was nothing more than a Ponzi scheme.
We should not equate economic success with creating value. After all, condemned Ponzi schemes Bernie Madoff had an estimated net worth of $ 17 billion at one point (he also had a whole decent watch collection sold by US Marshalls in 2009).
Software engineer Molly White is driving web3isgoinggreat.com, a web page that brings together all the inappropriate activities that take place in the world of cryptocurrency. The site’s motto is: “Web3 is doing well and certainly not a big scam dumping lighter fluid on our already burning planet.” To specify: web3 is a new buzzword for the cryptocurrency field and its adjacent business.
White’s motto also emphasizes this web3 uses a lot of energy, a by-product that can exacerbate climate change. Incidentally, any watch brand that announces its environmental initiatives and at the same time enters web3 territory is without a doubt hypocritical.
White’s website contains an ongoing counter of funds reported lost due to fraudulent activity on the web3. To date, it stands at $ 9.5 billion. It’s a lot of scams. In May 2021, the United States Federal Trade Commission reported a tenfold increase in losses from cryptocurrency investment fraud. The list goes on.
The risk of a watch brand is that it attacks a cryptocurrency “expert”, that there is a scam, that the brand’s reputation is irrevocably tarnished, that collectors doubt the brand’s claims about product quality, and that’s the end. of it for this brand. While it may seem like a distant possibility, there is already an episode that illustrates a good deal of this pending disaster.
About a year ago, Jacob & Co. announced that they would be selling the world’s first NFT of a luxury watch: SF24 Tourbillon “unique piece. “The plan was to auction off the NFT clock further ArtGrails, a self-proclaimed “Standalone Blue Chip NFT Platform”. After the supposed closing of the auction the reported result was that NFT sold for $ 100,000.
The problem is that the digital SF24 Tourbillon asset has never even been minted on the blockchain, or at least I can not find it. In November 2021, the Twitter user @tea profit describes the many flaws in ArtGrails and observes, “@Jacobandco X @argrails [sic] drop which they failed to sell to anyone but themselves lol did not even hit any blockchain proof. I posted these irregularities on my Instagram stories and asked if anyone could find SF24 Tourbillon on blockchain and DM me its address.
I was greeted by silence. I encourage readers to consult 676 ArtGrail items who have actually hit the blockchain to see if they can find the SF24 Tourbillon.
It’s one thing to wonder if digital assets are really worth the money. If the digital asset itself does not even exist on the blockchain, there is absolutely no reasonable basis to say it is worth anything, let alone $ 100,000.
In fact, when ArtGrail founder Avery Andon was asked about these events, he replied on Twitter, “These were made in the beginning and never promised any use outside of art.” Although the definition of an NFT is in some ways shrouded in mystery, it is widely accepted that it generally involves embossing a token on a blockchain. Unless, apparently, the seller promises no benefit whatsoever.
Ultimately, watch brands need to consider whether the risk that comes with the web3 site, as well as the environmental damage, is worth any possible reward. Watch collectors should also consider whether a watch brand’s decision to participate in web3 indicates a level of risk-taking that they can live with.
While complicated internal movements are becoming more widespread, the purchase of a watch involves a collector who relies on a manufacturer’s long-term viability. If a risk-averse manufacturer disappears, servicing a particular watch can be prohibitively expensive, if not impossible. So far, it may be reasonable to conclude that the best brand is the one that decides that NFT means “not for this” manufacturer.
Brendan M. Cunningham, PhD, is a professor of economics at Eastern Connecticut State University and founder of www.horolonomics.com. He has an upcoming book on the history of Rolex; you can find out more by visiting www.sellingthecrown.com and signing up to receive email updates about the project.
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