How a Swiss Watch Giant Copied a Bitcoin Startup’s Idea and Claimed It as Its Own
This is the story of how Swiss luxury watch brand Hublot claimed a place in the Bitcoin industry, by teaming up with the cryptocurrency broker of a small and way less deep-pocketed startup — then said it was first to create a sold-for-bitcoin-only timepiece.
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The story goes like this.
In 2013, Luis Rosende, an early bitcoin adopter and partner in a watchmaking company based in Hong Kong, wanted a timepiece that represented his love for Bitcoin. So he went and created what became the first brand to sell a watch exclusively for BTC. No credit cards or cash accepted, only crypto.
CRYPTOMATIC’s first collection was launched in 2014 with a limited edition of a few hundred pieces for a price around $900 USD — to the amusement of many who wondered if there was even a market for a high-quality Bitcoin branded timepiece, where a lot of thought was put into the designs and great materials, in contrast to other cheaply-produced novelty items.
Bitcoin Watch Startup Struggled Through Tough Times
It’s important to note that this happened in the midst of a bear market for bitcoin that came to be known as the “Bitcoin Winter”. Already in a slump, it worsened after someone unloaded 30,000 BTC on the market at well below the $300 trading price at the time. The market quickly absorbed the coins and the incident was known as the “Bear Whale Slaying”. Even art and memes were produced to commemorate the incident.
This marked the beginning of a continued price-decreasing streak that endured for at least two years.
During such depressed market, when the word Bitcoin was replaced by many industry “experts” with the word “Blockchain”, “DLT” or “the underlying technology”, CRYPTOMATIC stuck to its guns and kept selling watches while exchanging barely any BTC for fiat in the process.
After the first model sold out, CRYPTOMATIC went on to launch a second collection in 2017 — aptly called “THE HODLER”, in dedication to the spirited souls who didn’t give up and had the courage to keep believing in Bitcoin and “HODL” through the hard times. *
“Only those who went through this period remember the mental strength and firm belief one had to have in cryptocurrency in general, and bitcoin in particular.”, says Rosende.
During that year, the big break for CRYPTOMATIC came as bitcoin received mainstream attention and prices started a parabolic bull run that ended after reaching all-time high after all-time high, all the way to $20,000 per coin at the end of 2017.
CRYPTOMATIC’s patience and perseverance finally paid off, and they were finally able turn the company into a real business.
Being based in Hong Kong, CRYPTOMATIC released some of its BTC holdings through an OTC broker called Octagon Financial (which recently changed its name to OSL), and Rosende even became acquainted with some of the trading agents there, who would often ask him about his business and knew first hand it had been profitable, having a direct view into part of CRYPTOMATIC’s financials.
The Big Guys Enter (and Try to Take the Prize)
Needless to say, it was a little bit surprising to CRYPTOMATIC’s team when they learned a few months later that OSL had partnered with watchmaker Hublot to launch a “limited edition” of its modified Meca-10 Big Bang model, adding a Bitcoin logo to its previous design, making the color blue (because its “the color of Blockchain”, they said), and raising the price to $25,000 and selling it, surprise, for Bitcoin only. What a novel idea!
Speaking to Bitsonline, Rosende said:
“At first, I thought, this is good! It’s a validation of the idea we had four years ago. CRYPTOMATIC watches, using dependable Japan-made automatic movements and being thirty-seven times less expensive than the Hublot model, where designed for a different market, but it’s great to have more industry players at different price levels. Watches are in general a great conversation starter, this will only make more people aware of what a magnificent invention Bitcoin is.”
The excitement was short-lived though, after Hublot’s well-oiled corporate PR machine started sending press releases around the web about their great idea. Articles like this began to appear.
In the articles, Hublot made the following claims:
“With the launch of its Big Bang Meca-10 P2P, Hublot has produced a cryptocurrency and watch industry first” — which, of course, is false.
“It has become the world’s first watch brand to be sold only by Bitcoin” — also false.
“We want to be unique and the first in everything that we do. So, in this case we created a very specific watch sold by Bitcoin […]” said Hublot CEO Guadalupe. Again, this is false.
CRYPTOMATIC was the industry’s first and the company already had three collections out by the time Hublot’s watch was announced. Given it had endured the Bitcoin Winter out of a belief in cryptocurrency, and its founder had been a long-time advocate and hodler himself, this was particularly galling.
Additionally, in the world of design and collectible products, being first with an idea matters a lot.
Once the Story’s Out There…
Rosende tried to reach out to the media publishing the articles, asking them to get their facts straight and edit the claims. After being constantly ignored, he publicly asked the OSL team to do something about it in an industry leader’s chat group frequented by CEOs and founders of companies on the space.
One of OSL’s founders replied: “… let’s get our marketing team to correct it to say First Luxury Brand. You are very factually correct about being first and you should be very proud (and defensive) of that fact. Sorry you felt it was necessary to announce on this forum (and sorry to others that there’s not much popcorn).”
Five minutes later, Rosende founder received a call from one of the trading agents of OSL’s team, profusely apologizing and saying that the matter would get fixed. Being conscious that the damage was already done, the gesture to right a wrong was at least appreciated.
Unfortunately, weeks passed since then and no changes have been made to any of the published pieces were Hublot took credit for the idea. Rosende said he realizes corporate PR can’t command news sites to alter published articles but wonders how earnestly the requests were made.
Independents Vs. Corporates
One could argue that Hublot and CRYPTOMATIC are not really competitors, since usually Swiss watch brands consider themselves to be the only luxury watchmakers in the world and look down upon other companies on the space. It’s true they have very different price levels and cater to a different audience. But still, it’s wrong to claim ideas as their own when they’re not.
“Was it Picasso who said ‘good artists copy, great artists steal’? I guess Hublot are great artists after all,” Rosende said.
Large corporations have taken small, independent businesses’ ideas and used them for their own profits throughout history. But Bitcoin was supposed to strike a blow for smaller interests’ cause — at least in finance. True hodlers and believers might need to look at other industries where small companies have similar problems as well.
* The term HODL was kind of an inside joke in the Bitcoin community after it was misspelled by a forum user during a previous price dump. “I am hodling”, the user wrote after taking a few stiff drinks.
Does Cryptomatic have a legitimate complaint, or is it “just business”? Let’s hear your thoughts in the comments.
Images via CRYPTOMATIC, Smile Titans