Francesco Gardin, CEO of AIM-listed small-cap Quantum Blockchain Technologies PLC (AIM:QBT), believes he has “cracked the code” in his quest for a competitive edge in Bitcoin (BTC) mining.
But despite his esoteric background as a trained Italian theoretical physicist, Gardin joined the company’s board in its previous iteration as Clear Leisure, a company that dealt in something a little more universal – theme parks; water parks in particular.
Gardin eventually moved Clear Leisure away from theme parks after legal and planning issues, and repositioned itself at the forefront of blockchain technology R&D through a committed partnership with Malta-based data center operator, 64Bit Limited.
Internal revolution
In his words, Gardin “cleaned up the mess” that he got 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 about highly optimized five nanometer ASIC chips and high-level chip synthesis tools and highly efficient SHA-256 cryptographic hash functions.
Cuts through the jargon
But then he uses a simple analogy to cut through the technicalities: “Let’s say you know how to design the best engine to win Formula 1, but it takes a year and a half to produce the engine. But what if you could take some of the principles and apply them to existing engines, explains Gardin.
“Then you can increase the performance of existing engines using some of the principles you can use to design your own brand.”
One gets the sense that Gardin is drawn to the field of BTC mining because of the current state of how things work, or in his words:
“Everyone buys the same mining rig from the same manufacturers … It’s like going to a car race and your car is exactly the same as everyone else’s.”
Obviously, he’s a big fan of car-based explanations.
“I get tired of the main suppliers of miners increasing their prices depending on the value of Bitcoin,” Gardin said, adding: “Why are they able to do this? What makes them so good that they are the world’s largest supplier? I am sure something can be done.”
The end goal is to optimize existing BTC mining rigs using proprietary algorithms, thereby giving miners greater mining rewards (which Quantum would take a cut of).
This would not only benefit the miners, but would also lead to less waste of computer parts and greater energy efficiency.
Quantum’s algorithms could significantly reduce the footprint of Bitcoin mining farms – Source: Shutterstock
It is a strategy that undoubtedly comes with risk, but the upside potential is great.
“We are sitting on a potential nuclear bomb,” Gardin exclaimed, pointing out that the technology being developed at Quantum Blockchain aims to be “so fast that it will outperform all other implementations of (current mining algorithm) SHA”.
With some 1.8 million BTC yet to be mined worth around £32 billion at today’s prices, you can get an idea of the inherent value at play here.
And that’s assuming BTC doesn’t go up in value when the markets recover.
Ultimately, Quantum can give an owner of tens of thousands of BTC mining rigs a competitive advantage, while Quantum will take a portion of these financial gains.
But what is the worst case scenario?
“The risk factor is that none of the eight result teams get any results. However, that is not what we are witnessing, because I think we have weekly meetings with all teams, and we see the progress of each of them, he says.
Or Bitcoin could crash to zero, but let’s put that prospect aside for now.
That said, while Gardin waxes lyrical about the prospects of his proprietary algorithms, he’s not putting all his eggs in one basket.
Quantum’s 20-person crew – which is spread between London, Munich and Milan – is made up of separate teams that approach the company’s goals from a variety of directions.
At great risk…
Like all small companies in their research and development phase, Quantum Technologies is not generating revenue, but that is to be expected.
Undisclosed to the market, Gardin was reluctant to disclose Quantum’s money trajectory, but the company went public last year and raised £1.68 million in 48 hours, also issuing options to an investor as part of the fundraising, which was later exercised for a total value of a further £2 million.
Therefore, “we’re not really worried about raising money if needed,” he said.
He also mentioned a recent audit in which Quantum was required to show one year’s cash coverage for the budget.
In terms of intrinsic company value, everything depends on what becomes of Quantum’s potentially groundbreaking R&D phase.
So, is there a risk factor with Quantum? Secure.
But is there a huge upside potential? Clearly.
As Thomas Jefferson once said, “With great risk comes great reward.”
Quantum Blockchain shares changed hands at 1.47p each from 21 September 2022.
