REG-Quantum Blockchain Technologies Plc: R&D Update

Quantum Blockchain TechnologiesAnnouncement

13/03/2024 07:15

13 March 2024

 

Quantum Blockchain Technologies Plc

(“QBT” or “the Company”)

 

 

R&D and Business Update

 

Quantum Blockchain Technologies (AIM: QBT), the AIM-listed investment company
focusing on a R&D and investment programme within blockchain technology, is
pleased to provide an update of its recent R&D activities in the development
of its disruptive Bitcoin mining technologies.

 

New Development: Method C

 
* Method C – a new development based on Machine Learning and using
predictive Artificial Intelligence (“AI”) oracle technology is producing
consistent results during testing.
* Method C in testing environments has favorably demonstrated predictive
ability in c. 30% of the cases, if an input to SHA-256 will produce a winning
hash, resulting in a potential saving of energy.
 

Laboratory testing of a new Machine Learning Method applied to SHA-256
computational optimisation, Method C, is nearing completion. Consistent
results have been achieved over the last few months, which confirm the
performance of this new QBT proprietary predictive AI oracle, based on neural
networks and other Machine Learning methods.

 

The fundamental feature of Method C is its ability to predict whether an input
to SHA-256, the core algorithm for Bitcoin mining, is likely to generate a
winning hash, or not. The underlying assumption for Method C is that an oracle
decision is materially less computationally demanding than the SHA-256
calculation for the same input string.

 

The current average predictive performance of Method C in a testing
environment is nearly30% , meaning that SHA-256 will avoid processing an
input when the oracle will assess, within the current block, or the adjacent
future Bitcoin blockchain blocks, that it is highly unlikely to generate a
winning hash, namely almost 30% of the times. The Company believes this
achievement to be a major technical advancement for the SHA-256 algorithm, and
therefore for the Bitcoin mining industry.

 

The Company is currently in the process of assessing projected overall cost
savings to end users of Method C particularly given that, in order to execute
Method C, the ASIC chip must run additional logic gates in conjunction with
SHA-256. It is believed that through reduction of the number of SHA-256
computations by almost 30%, additional energy saving costs will be made
despite the energy used by the oracle. 

 

Method C differs from previously reported QBT’s Methods A and Method B in
that the former needs to be directly implemented onto the ASIC chip at the
manufacturing stage, whereas Methods A and B can be supplied to already
existing miners as a SaaS product.             

 

In parallel, following recent lab results, the Company is also evaluating the
use of Method C in conjunction with second patent application technology
(which itself is the subject of a current patent application) that could avoid
the need of such hardware implementation on an ASIC chip, in order to operate
Method C.

 

 

 

Business Developments

 
* The Company has entered into early-stage exploratory discussions with
Bitcoin rig manufacturers and US Bitcoin mining companies. 
* The Company believes that these discussions represent the first steps
towards entering into commercial and technical negotiations.
 

The Company has, over the past nine months, entered into early-stage
exploratory discussions, under Non-Disclosure Agreements (“NDA”), with two
large mining rig manufacturers in China and North America and with two of the
largest US Bitcoin mining companies. The board believes that these discussions
represent the first steps towards entering into commercial and technical
negotiations with the largest players in both the Bitcoin mining market and in
the Bitcoin mining rig manufacturing industry.

 

 

QBT Proprietary ASIC chip

 
* The Company has commenced development of a proprietary ASIC chip. A working
prototype is about to undergo development which will confirm performance
levels.
 

The Company has started a process to design and build a proprietary ASIC chip
for Bitcoin mining. Initial chips will be designed in an established process
node during the testing phase. The prototype will implement the proprietary
optimised version of SHA-256, as per the Company’s two patent applications
(i.e., ASIC UltraBoost and ASIC EnhanceBoost) as well as the new Method C. It
is expected that a working prototype will confirm the architecture feasibility
and performance of this new QBT proprietary intellectual property.

 

Once manufactured, the chips will not be used for industrial Bitcoin mining,
instead they will be utilised as an affordable real-world proving ground for
QBT’s disruptive Bitcoin mining technology. The Company believes that by
creating its own chip it will be better situated to construct its new
architecture from the ground up. The Company has decided to facilitate this
development with a mature process node chip due to its lower manufacturing
costs rather than for example, a market-leading 5nm prototype ASIC, which
would cost nearly £2m.

 

 

Update on the Porting of Method A and Method B onto commercial mining rigs

 
* The porting of Method A and Method B onto commercial rigs has proven to be
very challenging. The R&D team is currently testing different solutions for
the final stage in order to deliver a fully reliable product. 
* An exact date for market roll-out cannot be provided at this stage.
 

In the latter part of 2023, the Company selected two target mining rigs for
the porting of Method A and Method B including a Chinese machine based on the
BM13XX family of ASIC chips.

 

Transferring the Company’s documented laboratory test results, in particular
Method B, to use in conjunction to a commercial ASIC chip, has proven to be
challenging and further work is currently ongoing. Due to the very specific,
architectural choices in the Chinese manufacturer’s design of BM13XX chips
along with no formal collaboration between QBT and the manufacturer, the
Company first needed to understand the architecture of the chip and how to
best implement Methods A and B. The R&D team is testing different solutions
for this final stage in delivering the product, however the exact date of
delivery cannot be provided at this stage.

 

In addition to the above, the development of Method B, as an extension to
CGminer, a standard operating system used by almost all commercial mining
rigs, has been particularly complex, given the intricacies of more than 50,000
lines of open-source C-code developed by the CGminer community. The key issues
have been addressed and the Company is performing intensive live mining tests
24/7 using ASIC-based Bitcoin mining devices connected to two large mining
pools.

 

 

Patent Applications

 
* The Company is making positive headway with its first two patent
applications. 
* A third patent application is being drafted for the proprietary quantum
version of SHA-256.
 

The Company’s first patent application (ASIC UltraBoost) has now been filed
with the European Patent Office, while the second patent application (ASIC
EnhancedBoost) is going through a standard exchange of questions and answers
with the UK Patent Office.

 

A third patent application is being drafted for the proprietary quantum
version of SHA-256 and will be submitted as soon as practical.

 

 

Francesco Gardin, CEO and Executive Chairman of Quantum Blockchain
Technologies commented: “The exceptional lab results achieved with Method C
represent further evidence that QBT’s approach, of applying advanced AI and
Machine Learning techniques to improve the SHA-256 algorithm performance for
Bitcoin mining, is correct. All of the Company’s current efforts are now
focused on turning Methods A, B and C, into commercial products. This has
proved a very time consuming, due to the tremendous reverse engineering
efforts involved in using totally undocumented third-party ASIC chips.

 

 “All of the large North American and Chinese Bitcoin mining and chip
manufacturing companies with whom QBT has engaged, are waiting for the results
of our live tests, in particular with Method A and B, using currently
available commercial mining rigs, before we can move to the commercial stage
 As announced on 20 October 2023, we can confirm that Method A and B have
been redesigned to be technically available as a SaaS client-server cloud
application.”

 

 

 

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
Kasia Brzozowska

 

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.

 

 

ASIC EnhancedBoost: The Company’s second patent application, as announced on
24 July 2023. For further information, visit
quantumblockchaintechnologies.co.uk/patents-ip

 

ASIC UltraBoost: The Company’s first patent application, as announced on 30
September 2021. For further information, visit
quantumblockchaintechnologies.co.uk/patents-ip

 

Bitcoin Mining: Bitcoin mining is the process of using computer hardware to do
mathematical calculations for the Bitcoin network in order to confirm
transactions. Miners collect transaction fees for the transactions they
confirm and are awarded Bitcoins for each block they verify.

 

Block: Blocks are found in the Bitcoin blockchain. Blocks connect all
transactions together. Transactions are combined into single blocks and are
verified every ten minutes through mining. Each subsequent block strengthens
the verification of the previous blocks, making it impossible to double spend
Bitcoin transactions.

 

BM13XX: ASIC Family for Bitcoin mining chips manufactured by a very large
Chinese manufacturer of mining rigs.

 

C: Is a general-purpose very popular programming language.

 

CGminer: Is the most popular software system for GPU/FPGA/ASIC based miners.
CGminer is an open-source GPU miner written in C available for several
platforms like Windows, Linux and OS X.

 

Hash: A hash is the output of a hashing function, which is a mathematical
function that converts an input of arbitrary length into an encrypted output
of a fixed length.

 

Hash rate: The hash rate is how the Bitcoin mining network processing power is
measured. In order for miners to confirm transactions and secure the
blockchain, the hardware must perform intensive computational operations which
is output in hashes per second (THs is tera hashes per second).

 

Nanometer (nm): 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.

 

Neural networks: A neural network is a machine learning
(https://www.ibm.com/topics/machine-learning) program, or model, that makes
decisions in a manner similar to the human brain, by using processes that
mimic the way biological neurons work together to identify phenomena, weigh
options and arrive at conclusions.

 

Oracle: It is an intelligent system which is designed for only answering
questions and has no ability to act in the world.

 

Porting: In computer science, it is a process of adapting, sometimes with
modifications, a software component to enable its use on a platform different
from the original one. Porting is done when the software is somehow adjusted,
not when the source code is completely rewritten in a different programming
language.

 

Process Node: In the semiconductor industry, a technology node, also known as
a process node, process technology, or simply node, is a specific
semiconductor manufacturing process and its design rules. Different nodes
usually mean different circuit generations and architectures.

 

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.

 

 



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