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

Quantum Blockchain TechnologiesAnnouncement

23/05/2022 07:15

 23 May 2022

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

Update on Bitcoin Mining R&D

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

Highlights
* Bitcoin mining testing commenced using knowledge-based algorithms
* Bitcoin mining to follow shortly after completion of current testing
* Quantum computing simulations generating positive results, and
* New patent applications to be filed as soon as practicable
Bitcoin Mining 

The Company has moved from simulation testing and has started live
experimental BTC mining on its IT R&D platform, using a standard version of
the SHA-256 algorithm. The main purpose of the mining activity is to collect
real time data to populate the Company’s existing Big Data database, which
is then utilised by the R&D team with machine learning and data analysis
tools. The Company is pleased to report that this development has led to the
first two knowledge-based algorithms, which govern the SHA-256 computation,
being deployed, with mine testing now taking place. 

This is the final step of nearly a year’s work by one of the Company’s two
Machine Learning Teams. A third Machine Learning Team, which started work
earlier this year, to develop an alternative solution to the two Machine
Learning methods, has already delivered some innovative results. Both
approaches (Method ‘A’ and Method ‘B’) have a “probabilistic
element” approach, which over time, represents a “deterministic
superiority”. During testing, Method ‘A’ has improved the performance
in speed and energy consumption significantly compared to existing crypto
mining hardware. Taking exact measurements is part of QBT’s mining testing
programme.

The second knowledge-based mining approach (Method ‘B’) will need the
availability of a proprietary ASIC chip which, if successful, probabilistic
mining could be improved by several factors compared to today’s
deterministic BTC mining using commercial ASIC chips.  Theoretical analysis
is currently showing a material improvement, but experimental testing is
required to quantify it on a large number of real mining cases. The Company
is, therefore, assessing its competitive approach using GPU and FPGA chip
technology, instead of ASIC, such is the expected potential of this new
approach.

Subject to the confirmation of current testing, it is expected that two new
patent applications will be filed as soon as practicable.

More importantly, the Company expects to shortly commence real Bitcoin mining
using Method ‘A’, performed on the latest generation of GPU and FPGA.

Quantum Computing

Work on the Quantum version of the SHA-256 algorithm is ongoing, and it is
expected that a patent application will be filed once the Company achieves
theoretical confirmation. Importantly, the Company has been performing
simulations on an extremely scaled down simulated Quantum version of the
SHA256 algorithm, which have produced exact results (instead of approximate
results which are more typical with this type of computation) for the first
time – a milestone achievement for QBT.

During the next two months, the Company is aiming to get theoretical evidence
of whether the number of Qubits available on the next generation of commercial
quantum computers (expected to be released into the market in 2023), will be
enough to sustain the Company’s full SHA-256 computation.

Second patent

The current directions taken by both R&D teams of cryptography and ASIC design
are now more oriented on extreme silicon energy optimisation techniques, to
stress the limit of the physical properties of a 5nm ASIC, for which a leading
world-class ASIC design research organisation has been engaged.

The filing of the second patent for the SHA-256 optimisation has been put
temporarily on hold. This is pending results of the performance of potential
improvements which the Company believes are an alternative to an existing
patent, and within a similar speed and energy consumption order of magnitude.
An update on this patent will be released once a decision has been reached.

Francesco Gardin, CEO and Executive Chairman of QBT, commented: “QBT is
addressing an opportunity which represents a step-change for the Bitcoin
mining industry, and where our competitors have invested several years,
hundreds of researchers and engineers, as well as tens of millions of pounds.
After just one year, QBT is already in a position to start its knowledge-based
Bitcoin mining, using what we believe to be a unique and novel approach. The
results of our Bitcoin mining endeavours during the next few months will
determine the real value of our approach.

“At the same time, we continue to improve the chip design of ASIC based
traditional mining by optimising the SHA-256 algorithm and its silicon
implementation. Our Quantum Computing team has now successfully achieved its
first correct quantum computation of a reduced size version SHA-256 and is now
scaling up to the full SHA-256.

“The complexity of the task makes predicting the timeframe for publishing
new results and operational updates difficult. We have over 20 world-class
experts working in our R&D team to achieve these results. We will endeavour to
communicate more frequently with our shareholders. We strongly believe that
our efforts are taking QBT into a new direction of Bitcoin mining and ask for
shareholders’ patience until these efforts are rewarded by success.”

-ends-

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
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

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

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.

Probabilistic Approach: A probabilistic approach doesn’t guarantee to find
always the solution, but when it does, it takes far less computational steps.
When applied to a large number of mining attempts, the overall number of steps
will be considerably less, but solution will be fine in, say 90% of cases.

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.

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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