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

Quantum Blockchain TechnologiesAnnouncement

18/08/2021 07:05

18 August 2021

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

Crypto Mining R&D Project Update

The board of Quantum Blockchain Technologies (AIM: QBT) is pleased to update
the market on its Crypto Mining Research and Development (“R&D”) project,
which in the first instance will be used for the deployment of a proprietary
technology for more efficient cryptocurrency mining.

The primary goal of the project is to develop Bitcoin mining tools and
techniques which will significantly outperform existing mining equipment, both
in speed and energy consumption. While it is understood that this is extremely
ambitious, the radically advanced technologies being utilised; quantum
computing, Artifical Intelligence and Deep Learning, amongst others, renders
the goal achievable.

For this purpose, QBT has assembled a team of 13 sector experts, which is now
fully operational. The members of the team have been selected from across the
UK and Italy, and includes highly skilled professionals, Ph.D students and
university professors, with expertise in, Quantum Computing, Machine Learning,
Cryptography and Algorithms Optimisation Theory. QBT has entered into formal
agreements with various university departments to retain the services of the
new team. Any intellectual property and patents developed during the R&D
project will belong exclusively to QBT.

A number of working groups have been formed to address the key technologies at
the core of QBT’s crypto mining strategy. These are:
*
Quantum Computing
*
Cryptographic Optimisation
*
Deep Learning and Artificial Intelligence (“AI”)
*
FPGA / ASIC Design
*
Algebraic and Boolean Equation Reduction
*
Very Large Big Data
*
High performance computing architectures

As previously stated in the RNS of 2 June 2021, the Company has secured the
services of an expert specialising in cryptocurrency mining blockchain
optimisations.

The development of only half of the optimisations previously created by the
expert, has proved a 9.56% speed improvement using a commercial Graphic
Processing Unit (GPU), compared to the standard Bitcoin mining algorithm on
the same GPU. While it was never intended to use a GPU processor for Bitcoin
mining, it is providing invaluable quantitative feedback on the optimisation
techniques discovered by the in-house expert.

A second and more impactful set of optimisations for the Bitcoin mining
algorithm have now been identified by the expert, which will be filed as an
international patent within weeks. This is ideally the first of several
patents the Company plans to file in the coming months. More details on the
efficiency in running the Bitcoin mining algorithm with this new set of
optimisations, will be released shortly after filing the patent.

The Field Progammable Gate Arrays (“FPGA”) and Application Specific
Integrated Circuit (“ASIC”) expert retained by the Company will start
implementing the first set of optimisations on FPGA this month and early
completed versions of the FPGA are due by the end of October 2021, while the
optimisations covered by the patent being filed are due by December 2021.
Based on the performance achieved by the FPGA chip, it may be decided to use
it as the Company’s first mining engine. ASIC development work will start in
parallel in October 2021.

The design of the new IT infrastructure, which includes a 128 core Machine
Learning workstation and an initial one Petabyte memory expandable unit, to
host the proprietary enriched Bitcoin mining “Very Large Big Data”, is now
complete and its deployment into a data centre in Northern Italy will, due to
favourable tax benefits on R&D, happen in September 2021. To date, all R&D has
been completed using cloud resources.

At the beginning of August 2021, the first Deep-Learning optimisation of the
Bitcoin mining algorithm was autonomously generated by one of QBT’s AI
systems. This optimisation is identical to one of the phase-one optimisations
created by the expert, but generated independently. This early result strongly
supports the strategy adopted by the Company to invest in the heavy use of
Deep Learning.

Work on the D-Wave quantum computer has begun by QBT’s quantum team. While
an implementation of the core Bitcoin mining algorithm has already been
developed, programming of this quantum processor requires a totally different
approach to traditional software design. This is due to the specific approach
to quantum computing of D-Wave’s quantum processor, namely, quantum
annealing. However, the efforts represented by the very steep initial learning
curve, will hopefully, be rewarded by the significantly improved performance
expected to be delivered by D-Wave’s quantum processor. Updates on progress
achieved will be released in due course.

Francesco Gardin, CEO and Executive Chairman of QBT, commented, “Assembling
a new team and taking this project to operational status within four months
has been a difficult challenge and has required a tremendous effort. However,
thanks to our exceptional team, we have been able to achieve this.

“Over the past few months we have resisted the temptation to mine for
cryptocurrencies using ‘standard’ methods as it is not part of our current
strategy. QBT is looking to be a highly disruptive influence in the circa £75
billion* market of  approximately 2.21m Bitcoins yet to be mined and we
believe that the past few months of intensive R&D will be crucial to achieving
this. Our strategy for Bitcoin mining is knowledge intensive, rather than
capital intensive, based on the unique, combined interaction between our human
experts and our innovative AI systems.

“I would like to thank our shareholders for their patience and state that
our roadmap is clearly defined and we will pursue it with determination.”

* at the current market price of US$46,400 per Bitcoin

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.

-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              +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.

For further information, please
visit, www.quantumblockchaintechnologies.co.uk

Glossary of Terms:

Deep Learning:  Deep learning is an artificial intelligence (AI) function
that imitates the workings of the human brain in processing data and creating
patterns for use in decision making. Deep learning is a subset of machine
learning in artificial intelligence that has networks capable of learning
unsupervised from data that is unstructured or unlabeled. Also known as deep
neural learning or deep neural network.

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).

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.

GPU: A graphics processing unit is a specialized electronic circuit designed
to rapidly manipulate and alter memory to accelerate the creation of images in
a frame buffer intended for output to a display device. GPUs are used in
embedded systems, mobile phones, personal computers, workstations, and game
consoles.

Big Data: Big data refers to the large, diverse sets of information that grow
at ever-increasing rates. It encompasses the volume of information, the
velocity or speed at which it is created and collected, and the variety or
scope of the data points being covered (known as the "three v's" of big data).
Big data often comes from data mining and arrives in multiple formats.

Quantum annealing (QA): is a metaheuristic for finding the global minimum of a
given objective function over a given set of candidate solutions, by a process
using quantum fluctuations. Quantum annealing is used mainly for problems
where the search space is discrete with many local minima; such as finding the
ground state of a spin glass or the traveling salesman problem.



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