Luxury watches
Luxury watches and advantages of tokenisation
Luxury watches are high-end, mostly hand-crafted timepieces which are known for precision, use of premium materials and craftsmanship that goes into making them. Watchmakers generally use traditional and manual techniques to craft each luxury watch by incorporating unique features and designs in them; helping them to stand out from the crowd.
On the contrary, regular watches are much different since they are not meant to give luxury or comfort; as they are mass-produced by keeping attention to detail to a very minimum level. This is done to ensure they can easily be manufactured with almost none to very little human interference.
A luxury watch must have the following characteristics for it to be labelled as a “luxury watch.”
These characteristics include:
- Materials:
When it comes to luxury watches, nothing else matters more than their materials as they are famous to comprise a certain percentage of precious metals such as Platinum, Titanium, Gold or high-tech ceramics. Some luxury watches even consist of more exotic materials including recovered parts from the iconic titanic ship or moondust.
Moreover, luxury watches may also have gemstones like diamonds or precious stones in them. Since these gemstones are not dealing with any mechanical parts of the luxury watch, therefore, they are rather used for decoration purposes on either the watch-face or its strap.
- Chronometer:
Another important trait that sets luxury watches apart from others is that they are built by elite watchmakers who are certified as “chronometers.” In different parts of the world, independent & non-profit watch certification organisations are present that issue certification to their watchmakers.
COSC or Controle Officiel Suisse des Chronometres is the most renowned watch certification organisation that certifies Swiss watchmakers. Qualite Fleurier is another Chronometer standard for Swiss watchmakers, which is often considered to be an elite version of COSC.
SLET and SLME are German watchmaker certifications, whereas, JCII or Japan Chronometer Inspection Institute is the Japanese chronometer certification.
- Complication:
Complication is defined as additional features in a watch other than hours, minutes or seconds. In most cases, complications in luxury watches are included to increase their purpose, accuracy and joy.
There are three main types of complications:
It’s not a must for every luxury watch to have a complication, whereas, others can even have more than two. However, the majority of luxury watches have at least one complication.
- Price:
Because of the craftsmanship involved including precision engineering and high-quality materials, luxury watches are quite expensive. This is one of the reasons why a luxury watch serves as a “status symbol,” which of course does not come without a substantial price-tag.
While there is not any general starting price for a luxury watch, however, most of them can cost at least a few, if not, tens of thousands of US dollars.
Each brand has a different starting price for its’ luxury watches. The Tag Heuer Heuer-02T costs $15,000, whereas the Rolex Oyster Perpetual Reference 2726200 costs $5,300. Therefore, the starting price of a luxury watch depends on the brand and its pricing model.
As a token represents a particular asset or utility, tokenisation of luxury watches is the process of replacing sensitive information including their serial numbers or ownership records into unique and random tokens that exist on a secure blockchain platform.
Doing so ensures that sensitive information cannot be accessed or manipulated by unauthorised individuals.
Some of the advantages of the tokenisation of luxury watches include:
Through the help of tokenisation, luxury watches can easily be sold at online auctions, a trend that’s growing since the covid-19 led pandemic. Allowing investors and luxury watch enthusiasts from different parts of the world to become part of that auction; who would otherwise not be able to do so. Furthermore, a McKinsey study found that younger consumers prefer to purchase luxury watches online directly from brand retail channels. Therefore, tokenisation can be mutually beneficial for both consumers and the luxury watch industry.
The tokenisation of luxury watches also allows an expensive timepiece to be divided into several small parts. As a result, an investor can purchase a small portion of that watch depending on how much capital they want to invest instead of buying the entire timepiece. This will help to bring more people to invest in luxury watches as having a large sum of money upfront is not an issue.
Through tokenisation, luxury watches are accessible to global investors, which makes it easier for the seller to find a potential buyer. Tokenisation also makes it easier for tokens of a particular timepiece to be traded online at a certain profit margin.
As tokenised assets can be stored on a secure and decentralised blockchain, this helps to provide far greater protection against fraud or theft than any other technology out there.
With the help of blockchain technology, records of a luxury watch from day one can be stored in a transparent and auditable record helping to build trust and confidence among potential buyers.
This record can comprise of, but is not limited to how many times the timepiece was restored, its original price, and if the watch had any repairs done.