By Stella Kirchner
Have you ever heard of digital watches that cost a couple of thousand or even tens of thousands of dollars? When it comes to these watches, we are talking about digital design files secured via cryptographic algorithms, similar to cryptocurrencies like Bitcoin or Ethereum. These digital artworks that are stored in a blockchain are called non-fungible tokens, or NFTs. But what do tech and watch experts think of this new technology? In this article, Chrono24 Magazine breaks it down for you!
NFT Watches: Digital Art Inspired by Rolex, Omega, & Co.
Meet Jesus Calderon, a Chicagoan and one of the most successful NFT watch designers who create 3D digital watches inspired by such iconic models as the Rolex Daytona and Submariner. With catchy names like Daitona and Bitmariner (a play on Bitcoin), Calderon sells these artworks through his account Gen Watch on the OpenSea platform, the world’s largest NFT marketplace. “At first, I was making NFT art of various subjects. But I’ve always been interested in watches and was pretty sure I could make something cool. So I created 100 digital NFT watch models and made them available on the OpenSea platform until one day, a collector bought up all the models at once. I could have never imagined this becoming so successful,” recalls the designer.
But the story of Gen Watch wasn’t over for the watch and crypto enthusiast: “I want to list and sell 1,000 watches.” Indeed, Calderon has listed and provided the full details for every single one of his designs in a Google document. “For the first hundred watches, I was still manually designing each 3D watch on my computer and entering the data myself into OpenSea’s editor, which then stored my designs on the blockchain. A developer later discovered me and my virtual watches on Twitter and helped me design an algorithm to automatically generate watch variations according to my parameters,” Calderon explains to Chrono24 Magazine. At this point, he says, it takes between three and six hours to build a watch.
NFTs and Watches: Just a Short-Term Trend?
But will NFTs take hold of the watch world? “I have a feeling many companies that use NFTs – and not only in the watch industry – don’t really believe in the technology or even really know what they want to achieve with it in the first place,” muses the technology and lifestyle YouTuber Justin Tse in an interview with Chrono24 Magazine. Still, as a collector and investor, he’s enthralled by projects like Bulgari’s Octo Finissimo, featuring an engraved QR code linked to an NFT, as well as Jacob & Co.’s NFT collection limited to eight watches. “We know there are people out there who are excited about owning and investing in a digital watch. At the same time, there are others who find it odd to spend so much money on a digital asset you can’t even touch. But there are some very interesting projects at the moment that combine different tools and approaches. NFT watches by Jacob & Co., for example, offer owners the opportunity to dine with the brand’s CEO in addition to owning an NFT. That adds real value to the whole project,” Tse explains. Such ventures can build a bridge between analog and digital goods, thereby enriching the watch world.
Brands like Czapek, on the other hand, see the future of NFTs in the watch world chiefly as a replacement for authenticity certificates and other forms of paperwork. “We find ourselves in a digital age and as such, we need digital certificates for watches,” asserts Czapek CEO Xavier de Roquemaurel. In an earlier article, Chrono24 Magazine explored how these digital NFT certificates work and why they are becoming increasingly popular in the watch world.
Do NFTs in the watch sector pose a fraud risk?
The more we know about NFTs, the more we know about fraud cases. The fact that anyone can “tokenize” a certificate or work of art – in other words, produce an NFT – is one of the biggest problems facing the technology at the moment. “Nowadays, it’s very easy to create an NFT. Platforms like OpenSea allow users to generate an NFT from any image,” explains Mathew Chittazhathu, CEO of the Swiss start-up Adresta, which specializes in NFTs for watches. “Even if it’s harder to do so in the case of physical objects, there’s still the danger that people can issue NFTs who are not the true creators or owners.” Hence, a watch collector should always pay close attention to who made the NFT.
In the case of digital watches, it’s important to ensure that the artist is the true creator behind the work. By contrast, in the case of digital certificates of authenticity for watches, Chittazhathu warns, NFTs issued by private individuals are typically red-flags. As a rule, NFT certificates of authenticity should be produced by a watch brand or by a company working with the brand. “Our company does not issue NFTs for private individuals, but only works with watch brands and certified dealers.” Thus, a digital certificate of authenticity is not automatically reputable simply because it is an NFT. Likewise, not every NFT warrants suspicion.
Are watch NFTs a good investment?
Investments in NFTs have become very popular in recent years, but does this trend also apply to digital watches? In Jesus Calderon’s virtual watch collection, only the most famous icons of the watch world make the cut. “I started off with my Bitmariner because the Rolex Submariner is world-famous. Every watch brand has its own version of the Submariner in its catalog and has adapted this design in some way. I wanted to distill the essence of this unique design in my digital version,” explains the watch enthusiast. The designer also takes into account the prices of these watch icons when it comes to his own NFTs: “I adjust the prices of my digital watches according to the vale of the originals. For example, if we’re talking about a digital adaptation of the Rolex Submariner, a watch that originally costs over $15,000, I take about 150 for my Bitmariner,” Calderon explains. But the value of cryptocurrencies like Ethereum, the mainstream currency for purchasing NFTs, is in major flux. At the time of writing this article (August 9, 2022), the value of the Bitmariner corresponded to 0.085 Ether; just a month earlier, it would have cost 0.13 Ether. There have also been large jumps in the currency’s value over the past years: if you bought Ether three years ago, you will have seen a value increase of 750% (as of August 2022). However, if you invested at peak prices last year, you will have incurred major losses. When the value of currency fluctuates, so too do the items purchased with that currency.
In addition to spikes and dips in cryptocurrency value, buyers must also judge for themselves if the NFT is worth the current price: “You have to remember that we are still in the hype phase of NFTs,” Matthew Chittazhathu cautions. “And where there is hype, there is also speculation, which in turn leads to fluctuation.” YouTuber Justin Tse recommends: “Watch enthusiasts should only buy watch NFTs if they are truly convinced in the technology.” NFT designer Jesus Calderon doesn’t anticipate competition between digital and physical models. “My dream watch is a Lange 1 from A. Lange & Söhne. Maybe one day I can own this beautiful model,” the designer hopes.