REG-Quantum Blockchain Technologies Plc: Bitcoin Mining Update

Quantum Blockchain TechnologiesAnnouncement

10/05/2023 07:15

10 May 2023

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

Significant improvements in bitcoin mining success rate and energy use

driven by advances in proprietary software

Quantum Blockchain Technologies plc (AIM: QBT) has now completed a key testing
phase of its proprietary bitcoin mining search algorithm and is pleased to
announce satisfactory results. The test results show that QBT’s algorithm,
known as Method B, has theoretically increased the rate of successful bitcoin
mining by 2.6 times compared to standard bitcoin mining industry practices
widely used over the same time period.

The research results and the statistical methodology used to validate them
give the Company confidence that the research approach being used has uniquely
identified some properties of the    SHA-256 space that other research
teams have not detected.

The Company’s algorithm also theoretically reduced electricity consumption
by 4.3%. To illustrate this, a mining farm - with 100,000 miners((1)) - would
save up to $4.5 million per year when applying Method B and only considering
the impact of the reduced energy consumption.

Given the expense and accessibility of current bitcoin mining equipment, ASIC
chipsets and mining strategies, these results are based on a bitcoin mining
difficulty((2)) lower than the difficulty currently in the market. However,
the research results and the statistical methodology used to obtain them give
the Company confidence that its algorithms should be scalable for commercial
use. This would enable a step-change improvement in the probability of
successfully mining bitcoin using the current bitcoin mining standards in
mining equipment, ASIC chipsets and mining strategies akin to what is in
commercial use globally.

Up until now, the bitcoin mining industry has mainly sought to achieve
improved mining efficiency by optimising hardware and its integrated firmware.
The Company’s R&D team of senior researchers from leading European
universities has taken a different approach. It is focusing its intensive R&D
efforts on identifying and exploiting certain key predictive properties in the
operation of bitcoin’s SHA-256 cryptographic hash functions
(https://en.wikipedia.org/wiki/Cryptographic_hash_function) as originally
designed by the United States National Security Agency
(https://en.wikipedia.org/wiki/National_Security_Agency) and first published
in 2001.

Assuming continued successful progress with testing, the Company believes its
proprietary software has the potential to significantly improve the financial
performance of bitcoin mining once deployed at full-scale. It is currently
expected by the board that QBT’s algorithm could successfully improve the
likelihood of mining success while lowering the energy cost of the process.

Francesco Gardin, chairman and CEO of Quantum Blockchain Technologies
summarises the Company’s recent experimental success, “Following nearly
two years of research by our Machine Learning R&D teams, we believe we have
achieved conceptually what appears to be a real breakthrough in the bitcoin
mining industry. Under rigorous testing conditions, our algorithms are
achieving a marked increase in the frequency of successfully mining bitcoin,
while lowering electricity use. 

“We will now speed up the next phase of testing allowing us to confirm our
current results at a degree of difficulty as close as possible to conditions
now prevailing in the bitcoin mining industry.  In addition, we intend to
begin development of the industrial commercialisation phase of our bitcoin
mining Method B, including deployment on mining rigs of the type currently in
widespread use by larger bitcoin mining corporations.

“The Company’s R&D work is both designed and carried out by a team of
senior researchers, including scientists previously working as full tenured
professors at leading European universities.

“In parallel, the Company continues its R&D efforts to design and fabricate
a next generation bitcoin mining ASIC, as well as utilise quantum computing
hardware and software to similarly improve the success rate of mining
bitcoin.”

(1) Assumptions are nominal 100 Th/s hashing power, 3050W energy consumption
per miner and cost of electricity of 0.04 $/kWh.

(2) Every blockchain has a mining process by which miners can generate new
coins. An algorithm regulates how difficult it is for the miners to mine a
certain block. This difficulty is represented by a number known as mining
difficulty. The more the hash rate, the more difficult it will be to find
valid hashes for a block. Currently, it takes about 10 minutes to mine a
Bitcoin block. After every 2,016 blocks are mined, Bitcoin adjusts its mining
difficulty, in order to keep the total block time at 10 minutes. The
difficulty increases based on the number of miners and their combined hash
rate. In 2009, difficulty started from 1, today it is more than 48T.

-ends-

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 Kasia Brzozowska    +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.



Copyright (c) 2023 PR Newswire Association,LLC. All Rights Reserved