REG-Quantum Blockchain Technologies Plc: Bitcoin Mining R&D Update

Quantum Blockchain TechnologiesAnnouncement

11/03/2022 07:15

11 March 2022

Quantum Blockchain Technologies Plc
(“QBT” or “the Company”)

Bitcoin Mining Research and Development Update

The board of Quantum Blockchain Technologies (AIM: QBT) is pleased to update
shareholders on the current progress of its Bitcoin mining R&D activities.

The Company’s multi-technology approach to develop the fastest Bitcoin
(“BTC”) miner in the market, is moving rapidly ahead. The board and its
R&D Team are extremely pleased with the results achieved to date and the
Company intends to put them into practical use as soon as possible. In the
meantime, QBT is securing its Intellectual Property (“IP”) assets, by
filing a number of new patent applications for each new research result
obtained.

Quantum Mining

The Quantum Computing R&D Team has now developed a quantum version of a BTC
mining algorithm, based on Quantum Bit (“qubit”) based quantum
computation, using quantum logic gates. Testing of the quantum programme will
begin shortly on a quantum computer, following the signing last week of an NDA
with a major US technology manufacturer.

The new qubit based algorithm is significant enough to encourage the Company
to file a patent application to protect this BTC mining development, which
will be lodged shortly.

Following six months of testing on the D-Wave quantum computer, which is based
on adiabatic quantum annealing computation (“quantum annealing”) (i.e.,
not using qubits / quantum logic gates), the Company completed the analysis
phase in December 2021, acquiring all of the necessary information. Testing
has been suspended on this type of quantum computer. Most of the work
conducted for programming the adiabatic quantum annealing based computer, has
been, however, very relevant for the Quantum Computing R&D Team, and has
resulted in an innovative reformulation of SHA-256 (the core BTC mining
algorithm) as an optimisation problem.

This new reformulation to be solved with a quantum annealing approach, has now
been developed and tested on a cloud accessed quantum annealing software
simulator, made available to the Company’s Quantum Computing R&D Team by a
major Japanese producer. A version of the quantum annealing simulator has been
implemented, using available specifications which will be run initially from
an IT R&D platform in a datacentre in Milan, Italy. This will allow the
Company to develop quantum annealing optimisation simulator code on a number
of dedicated FPGA chips.

The combined use of the quantum optimisation algorithm and the ASIC miner,
which is currently under development by the Company, is expected to increase
the hashing speed, compared to the best ASIC miners announced by competitors.
Tests are ongoing to confirm these initial experimental indications.

A patent application relating to the optimisation conversion of the BTC mining
algorithm and its integration with an ASIC based miner, will be filed as soon
as practical.

Artificial Intelligence based Bitcoin Mining

The Company is pleased to announce that it has appointed an international
expert in the field of Machine Learning to its AI Research Team. The expert is
the former head of the Neural Networks Research Laboratory of the Department
of Computer Science of the University of Milan.

The use of AI techniques (mainly Machine Learning) to speed up the successful
mining of BTC, has been studied by the R&D Team. As part of the testing
process, these techniques have been partially applied across different levels
of the entire BTC mining process. As soon as quantitative results are
available the Company will build prototype “solo” BTC miners (i.e., not in
pool mining), using existing or separate Computer Processing Units
(“CPU”), Graphics Processing Units (“GPU") and FPGA cores.

A patent application on the specific AI techniques developed, will be filed as
soon as practical.

ASIC Development and Second Patent

Drafting of the technical document for the Company’s second patent
application is now complete and implementation on an FPGA is nearly finished.
Results of the overall performance achieved by the combination of the
optimisations from the first and the second patent will be obtained for the
final FPGA code shortly. The Company plans to conduct tests using the new
optimisations within an ASIC development environment, to provide more accurate
measurements with respect to energy consumption and mining speed, on a 5nm
ASIC, which is the Company’s ultimate goal.

The Company is working with two independent partners to conduct verification
tests on the final performance of QBT’s prototype ASIC. Their role is also
to advise on how best to achieve efficiencies in coding, in order to best
exploit the specific manufacturing technologies of individual silicon
fabricators, when it comes to manufacturing of the prototype chips.

Quantitative performance data will be available within a few weeks.

IT infrastructure

The Company’s IT infrastructure is now fully operational. Solo mining
activities, created to test AI accelerated miners, running on CPU, GPU and
FPGA are currently being finalised. The Company will provide the results of
these tests once testing has been completed.

Francesco Gardin, CEO and Executive Chairman of QBT, commented: “We have
made impressive progress on all our core R&D areas, and we will now start
field testing our optimisations of BTC mining in the next few weeks.

“We are also conducting internal and independent performance measures to
help us assess mining speed and energy consumption within the ASIC line of
research, which is now at the simulation stage. Based on data we have recorded
to date, we expect to see a higher performance than originally estimated; this
is mainly due to the optimisations which will be included in the second patent
application, based on the work of our cryptography expert and the coding
techniques implemented by our FPGA/ASIC Design Team.

“All of the results will be verified before any cooling techniques are
implemented which, if applied, could allow for a further increase in speed.”

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

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

CPU: The central processing unit (CPU) is the unit which performs most of the
processing inside a computer. It processes all instructions received by
software running on the PC and by other hardware components and acts as a
powerful calculator.

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.

Pool Mining: As part of bitcoin mining, mining “pools” are a network of
miners that work together to mine a block, then split the block reward among
the pool miners. Mining pools are a good way for miners to combine their
resources to increase the probability of mining a block, and also contribute
to the overall health and decentralization of the bitcoin network.

SHA-256: 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.

Quantum Annealing (QA):  which also includes adiabatic quantum computation,
is a quantum computing
(https://research.aimultiple.com/quantum-computing/#what-is-quantum-computing) method
used to find the optimal solution of problems involving a large number of
solutions, by taking advantage of properties specific to quantum physics like
quantum tunnelling, entanglement and superposition.

Quantum Logic Gates:  Is a rudimentary quantum circuit
(https://www.quantiki.org/search/node/quantum%2Bcircuit) operating on a small
number of qubit (https://www.quantiki.org/search/node/qubit)s. They are the
analogues for quantum computer
(https://www.quantiki.org/search/node/quantum%2Bcomputer)s to classical logic
gate (https://www.quantiki.org/search/node/logic%2Bgate)s for
conventional digital computer
(https://www.quantiki.org/search/node/digital%2Bcomputer)s. Quantum logic
gates are reversible (https://www.quantiki.org/search/node/reversible),
unlike many classical logic gates.

Qubit: A classical bit can be in two states, it can be either zero or it can
be one. A quantum bit or qubit, however, can be in a sort of zero state and in
a one state at the same time. This situation is called a superposition of
(quantum) states. Qubits have some very particular properties: for instance,
it is not possible to make copies of qubits.



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