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 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.