REG-Quantum Blockchain Technologies Plc: Update on FPGA and ASIC Development

Quantum Blockchain TechnologiesAnnouncement

05/11/2021 07:05

                                    5
November 2021

Quantum Blockchain Technologies Plc

(“QBT” or “the Company”)

Update on FPGA and ASIC Development

The board of Quantum Blockchain Technologies (AIM: QBT) is pleased to announce
that its first phase of the FPGA development has now been completed.

HIGHLIGHTS
*
Disruptive Bitcoin mining technology development is well under way
*
QBT researching multiple routes to faster Bitcoin mining
*
Bitcoin algorithm core architecture for an FPGA chip has been selected and
modification completed
*
To keep costs low, initial testing performed on an FPGA chip
*
Architecture design work for ASIC prototype to commence before year end
*
Testing will commence on the final design of the more expensive / faster ASIC
prototype chip by end of Q1 2022
*
Ultimate goal is to produce an enhanced 7 nanometers (nm) ASIC chip
*
Early internal calculations show a final chip that could perform 24% quicker
than current best available ASIC

OVERVIEW

The goal of the Company is to develop disruptive Bitcoin mining technology, to
mine both faster and with less overall energy consumption than current
practices. A number of advanced technologies are being used by QBT to achieve
this goal; namely, quantum computing, AI Neural Networks - Deep Learning,
Algebraic-Boolean reductions, Very Big Data, Cryptography and custom chip
 programming and design - using GPU, FPGA and ASIC chips.

The current technique used by producers of Bitcoin mining technology on
dedicated computers to achieve the fastest performance, is by manufacturing
single purpose, customised ASIC chips, which can perform only one wired
function, i.e, the computation of the double hashing; the SHA26 cryptographic
algorithm used to extract Bitcoins. The simple reality is that the faster the
algorithms are computed and the more ASIC chips deployed, the more chances a
miner has to extract Bitcoins.

Before manufacturing an ASIC chip, which is an expensive operation, there are
usually two initial steps; firstly, to develop the logic gates architecture
which will be used by the final ASIC chip – this is performed on a cheaper
but slower chip, called an FPGA, which already contains some pre-defined
functions - and secondly, by customising the design to take advantage of the
greater freedom offered by ASIC technology, initially by manufacturing a
prototype in a small batch, to keep costs low. The final stage, manufacturing
the completed ASIC chip, is an expensive process, but the end result is a very
small scale (currently up to 5nm) processing chip, which is significantly
quicker, leading to greater results when mining Bitcoin.

QBT has now completed the FPGA development phase and is moving to develop its
ASIC protype.

Initial estimates derived from the FPGA performance obtained from our internal
testing, would indicate that when the final industrial ASIC prototype design
is completed it could outperform the fastest ASIC chip, currently being used
to mine Bitcoin by at least 24%.

Moreover, early experimental evidence, using AI techniques to multiply by
several factors the speed of an FGPA for computing the Bitcoin mining
algorithm, would make even an FPGA a competitive Bitcoin mining tool. This
same principal would apply to ASIC and other existing commercial mining tools.
Tests on this innovative approach, will continue over the next three months.

DETAILED VIEW

Following testing of a variety of design options, an unrolled SHA-256
architecture has now been implemented, with a number of existing optimisations
coded, for QBT’s FPGA chip prototype.

The Company’s patented ASIC ULTRA Boost improvements (patent under
application) will be added in the next few weeks, as a result of the close
cooperation between the in-house cryptography expert and the Company’s FPGA
designer.

Current performance of the Bitcoin mining architecture developed by QBT on the
FPGA (based on 16nm technology, at 600MHz basic cycle and the average general
purpose available coding area) is 2.8 Giga Hash per second (GH/s) with an
estimated 50W energy consumption. The ASIC ULTRA Boost optimisation should
improve the above performance by 7% as previously reported.

To put things into context, our in-house expert has calculated that, as of
today, a top of the range FPGA (using QBT’s architecture of the
implementation of the algorithm, to make it run at approximately 15 times
faster than the standard FPGA), is still approximately 23.4 times slower than
the best-in-class existing 7nm ASIC Bitcoin mining chip and much less energy
efficient.

It was never the Company’s intention to compete on speed and energy
efficiency against an ASIC chip, using an FPGA chip but, in order to keep
testing costs significantly lower, it has been a necessary step for QBT to
take in this phase of its development. As a result, the Company is now in a
much better position to assess the performance projection of its SHA256
Bitcoin mining architecture, and therefore the team is confident that it can
now transfer this solution over to an ASIC chip.

Preliminary approximate calculations indicate that on a 12nm ASIC chip,
extrapolated by comparing it to a commercial mid-range 16nm ASIC Bitcoin
mining chip (with circa 300 million gates), our ASIC could achieve a double
hash rate of 392 GH/s, with the ASIC ULTRA Boost optimisation adding an extra
7% as previously announced, reaching 419 GH/s, which would still be 2.26 times
slower than the fastest ASIC commercially available.

However, the Company strongly believes that when compared with the best
commercial 7nm ASIC chip for Bitcoin mining available on the market today, an
industrial production of QBT’s ASIC at 7nm, would indicate a double hash
rate of 1.19TH/s, hence 24% faster.

This performance of QBT’s architecture on the 7nm ASIC, doesn’t yet
include the 7% efficiency achieved by the optimisation of the patent
application filed in September, which is still to be implemented. The current
work on a second patent by the Company’s cryptography expert will hopefully
lead to further material optimisations.

Detailed simulations on energy consumption will be run as soon as our ASIC
gate design layout is completed.

ASIC programming will start this month, and we estimate that by the end of Q1
2022 we will be able to announce when the first batch of prototype chips will
be available for in-house testing. Following the completion of testing, the
Company envisages that chip production, for QBT’s own use, will commence by
the end of 2022.

Concurrently, QBT’s R&D team is also considering an alternative SHA256
computing approach (which is categorised as the basic Bitcoin mining
algorithm), and this will be tested within the next three months. The joint
effort by the members of our AI team and the Company’s FPGA expert, could
improve the current FPGA hash rate of 2.8GH/s by a highly material multiple
factor, making mining by the slower FPGA chip potentially competitive against
the best-in-class ASIC chip. Should this route be successful, mining via this
method could commence as early as Q2 2022.

These AI techniques, if successful, could also improve the performance of
current commercial ASIC Bitcoin miners.

The Company’s new R&D IT infrastructure, which will also allow for Bitcoin
mining tests to be carried out, will be operational in five weeks’ time. The
wait has been due to the serious worldwide shortage of silicon chips, which is
delaying the expected delivery of the hardware. However, the Company has
adopted the heavy use of cloud resources in order to avoid any interruption in
the R&D activities to the various groups.

The Company remains very confident on the R&D strategy it has adopted which it
believes could result in disruptive Bitcoin mining. It is worth noting that
the Company’s R&D programme is fully funded until the end of 2022.

Francesco Gardin, CEO and Chairman of QBT, commented, “Our R&D has delivered
some very impressive results in a very short time: In only four months since
the programme commenced, we have filed a patent application where we believe
the ASIC ULTRA Boost has improved the standard mining algorithm, after five
years of little or no progress following the publication in 2016 of the ASIC
Boost paper.

“We will soon be ready to start the design of our ASIC Bitcoin mining chip
which, on paper, already outperforms, in speed, the current best in class ASIC
Bitcoin mining commercial solution. This significant improvement is before the
implementation of the new optimisation from ASIC ULTRA Boost and we are
confident that our second patent application, which is under development by
our cryptography expert, will add a further radical improvement to the
process, including also a reduction in energy consumption.

“All our other teams are working extremely hard on the other R&D fronts:
Quantum computing and AI Neural Networks-Deep Learning and algebraic-Boolean
optimisation. Meanwhile an AI accelerator will be tested within the next three
months, which we believe could radically improve the performance of existing
commercial miners, as well as our GPU, FPGA and, in the near future, our AISC
chip. We consider that the R&D activity undertaken by our group of 15 experts
is unbelievably exciting and, if successful, could potentially be radically
innovative for the industry.”

For further information please contact:

Quantum Blockchain Technologies Plc

Francesco Gardin, CEO and Executive Chairman   
                                    +39 335
296573

SP Angel Corporate Finance

(Nominated Adviser & Broker) Jeff Keating  
                                   +44 (0)20
3470 0470

Leander (Financial PR)

Christian Taylor-Wilkinson     
                                                           
+44 (0) 7795 168 157

About Quantum Blockchain Technologies Plc

QBT (AIM: QBT) is an AIM listed investment company which has recently
realigned its strategic focus to technology related investments, with special
regard to Quantum computing, Blockchain, Cryptocurrencies and AI sectors. The
Company has commenced an aggressive R&D and investment programme in the
dynamic world of Blockchain Technology, which includes cryptocurrency mining
and other advanced blockchain applications.

Glossary of Terms:

ASIC: An application-specific integrated circuit is an integrated circuit chip
customized for a particular use, rather than intended for general-purpose use.
ASIC chips are typically fabricated using metal-oxide-semiconductor (MOS)
technology, as MOS integrated circuit chips

FPGA: A field-programmable gate array is an integrated circuit designed to be
configured by a customer or a designer after manufacturing – hence the term
"field-programmable". The FPGA configuration is generally specified using a
hardware description language (HDL), similar to that used for an
application-specific integrated circuit (ASIC).

GPU: A graphics processing unit (GPU) is a computer chip that renders
graphics and images by performing rapid mathematical calculations.

Nanometer: A nanometer is a unit of measurement that is equivalent to one
billionth of a meter. It is widely used as a scale for building tiny, complex,
and atomic-scale computing and electronic components, such as ASIC chips.

SHA256: Secure Hashing Algorithm (SHA) -256 is the hash function and mining
algorithm of the Bitcoin protocol, referring to the cryptographic hash
function that outputs a 256 bits long value.



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