Francesco Gardin, chief executive officer of AIM-listed small-cap Quantum Blockchain Technologies PLC (AIM:QBT), thinks he has “cracked the code” in the quest for a competitive edge in Bitcoin (BTC) mining.
But despite his esoteric background as an Italian theoretical physicist graduate, Gardin joined the company board in its previous iteration as Clear Leisure, a company which dealt in something slightly more universal – theme parks; water parks specifically.
Gardin ultimately pivoted Clear Leisure away from theme parks following legal and planning issues, repositioning itself at the forefront of blockchain technology R&D through a binding partnership with Malta-based data centre operator, 64Bit Limited.
In his words, Gardin “cleared the mess” that he came into.
Clear Leisure then announced its internal revolution to the world with a name change in April 2021.
And so, Quantum Blockchain Technologies was born.
As an artificial intelligence and technology boffin, Gardin doesn’t shy away from throwing around arcane terms and concepts when explaining what he hopes to achieve through Quantum Blockchain.
He talks of highly optimised five-nanometre ASIC chips and high-level chip synthesis tools and highly efficient SHA-256 cryptographic hash functions.
Cutting through the jargon
But he then uses a simple analogy to cut through the tech speak: “Let’s say that you know how to design the best engine to win the Formula One, but it takes a year and a half to manufacture the engine. However, what if you could use some of the principles and apply them to existing engines,” explains Gardin.
“Then you could boost the performance of existing engines using some of the principles that you could be using to design your own brand.”
One gets a sense that Gardin is attracted to the field of BTC mining due to the current state of how things work, or in his words:
“Everybody’s buying the same mining rig from the same producers… It’s like going to a car race and your car is exactly the same as everyone else’s.”
Evidently, he’s a big fan of car-based explanations.
“I get fed up with the main suppliers of miners raising their prices depending on the value of Bitcoin,” Gardin said, adding: “Why are they in a position to do this? What makes them so good that they are the number one supplier on the planet? I’m sure that something can be done.”
The end goal is to optimise existing BTC mining rigs using proprietary algorithms, thus netting miners greater mining rewards (from which Quantum would take a cut).
This would not only benefit the miners but would also lead to fewer computer parts waste and greater energy efficiency.
Quantum’s algorithm’s could significantly reduce the footprint of Bitcoin mining farms – Source: Shutterstock
It’s a strategy that no doubt comes with risk, but the upside potential is huge.
“We are sitting on a potential nuclear bomb,” Gardin exclaimed, pointing out that the tech being developed at Quantum Blockchain aims to be “so fast that it will outpace all other implementations of (current mining algorithm) SHA”.
With some 1.8mln BTC yet to be mined worth some £32bn at today’s prices, you can get an idea of the intrinsic value at play here.
And that’s assuming BTC doesn’t go up in value as markets recover.
Ultimately, Quantum could give an owner of tens of thousands of BTC mining rigs a competitive advantage, while Quantum would bag a slice of those financial gains.
But what is the worst-case scenario?
“The risk factor is that none of the eight results teams get any result. That’s not what we’re witnessing though, because I mean we have weekly meetings with all teams and we see the progress on each of them,” he says.
Or Bitcoin could crash to zero, but let’s put that prospect aside for now.
That being said, although Gardin waxes lyrical about the prospects of his proprietary algorithms, he’s not putting all of his eggs into one basket.
Quantum’s 20-person crew – which is spread between London, Munich and Milan – comprises separate teams that are approaching company goals from numerous directions.
With great risk …
Like any small-cap in its research and development phase, Quantum Technologies is not generating revenues, but that’s to be expected.
Not being information disclosed to the market, Gardin was reluctant to divulge Quantum’s cash runway, but the company went to market last year and raised £1.68mln in 48 hours, also issuing options to one investor as part of the fundraising, which were subsequently exercised for an overall value of additional £2mln.
Thus “we are not really worried about raising cash if necessary,” he said.
He also mentioned a recent audit where Quantum was required to show one-year cash coverage for its budget.
As for an intrinsic company value, that all depends on what becomes of Quantum’s potentially groundbreaking R&D phase.
So, is there a risk factor with Quantum? Sure.
But is there huge upside potential? Totally.
As Thomas Jefferson once said: “With great risk, comes great reward.”
Quantum Blockchain shares were changing hands at 1.47p each as of September 21, 2022.