The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Just in case anyone missed the hidden message in QBT's X video today:
The SHA-256 algorithm was originally developed for cryptography i.e. the writing of messages which are secure (unreadable) between sender and recipient.
The creator of Bitcoin, SN, 'elbowed' the SHA-256 algorithm into his (what a guess!) Bitcoin production and distribution machine.
Academics, including QBT's, had studied SHA-256, for several years prior to it's now recognised use in Bitcoin.
So, from an academic perspective, one could say QBT is not fundamentally about faster Bitcoin mining. It's about faster cryptography solving.
FG perhaps today almost looked dismissive at the use of SHA-256 for a purpose it was not originally intended for.
There is speculation that SN - Bitcoin's creator - was actually a large group of researchers or government entity, say for example the NSA. But some suggest that an off the peg component - SHA-256 - would only have been chosen by an individual or small group.
It is almost inconceivable that PSE would be included in this new trial. The NHS only adopts new better mousetrap technology when it has had many years of validation in other countries. The NHS is managed to allocate most of its annual cash to its employees and former employees through pension payments. It simply doesn’t have the inclination to allocate cash to new technologies.
But from a business perspective we shouldn’t really care. The US does adopt new technologies, especially when the payers save money. Hence why CirT is gaining traction. The PSE will also gain traction in the US for the same reason. As we all know the US market is 10 times the size of the UK.
Can’t help but think you must know this Dug. Is the NHS trial just a straw dog?
Thanks DugWalker. Excellent post. My take is the probability of all 5 (I think) biomarkers, which in turn depend on 3D genome shapes being in particular designs, being positive and so giving a positive ( confirmed by biopsy) PSE result is much much less likely to be pure chance than a single biomarker trial like PSA. Hence why trial statisticians assign a high probability to OBD’s 147 patient trial. On a basic non-technical level we could argue OBD did 5 tests on 735 patients, it just so happened the same 147 people applied 5 times.
The really clever bit was OBD crunching vast amounts of data to find 5 tell tell biomarkers prior to the trial.
Hope that makes sense. Let me know if I’ve got it wrong.
Can QBT Do What They Say They Can Do ?
This is the big $ 1bn ( or more!) question. Some don't believe they can, claiming:
' A small micro cap wouldn't be able to work this out if bigger, much better resourced, companies haven't.'
That doesn't really make sense. All breakthroughs are made by one or a small group of people. The same logic would argue Einstein didn't create the theory of relativity because he was only one man. Also, the theory needed to create Method B is a product of thinking, not CapEx. So the inability of QBT to match big company CapEx is not relevant. Bitcoin itself was created by one man or a small team.
'Even if a small team could work this out, it wouldn't be these guys.'
That doesn't really make sense. The limited visible evidence available suggests QBT has assembled a very experienced and talented group of academics. Including Dr Lov Grover, a consultant at QBT, who in a Jan 6 RNS described QBT as having 'perhaps, the best management team in the area of quantum'. He praised FG and Dr Rita Pizzi ( Chief Research Officer) by name. For those unfamiliar with Lov Grover, Grover's Algorithm is a foundational component of quantum computing. It allows unstructured databases to be searched much quicker than was previously thought possible. His algorithm is the equivalent of finding a needle in a hay stack quickly. He cracked it by having all the hay self combust, leaving the needle. Having Dr Grover join your company and publicly praise the management is about the highest seal of approval. Come to think of it, finding a needle in a hay stack quicker than others is rather like what QBT's Method B does.
'Even if this small team have worked this out, they won't be able to make a working product out of the theory.'
It is a bit tricky. You have to address latency, as do software suppliers to high frequency trading houses who place their servers by the HFT servers. You have to protect your coding as do the Renaissance Technologies of this world by keeping your coding in house and separate from the exchanges' servers. Hence today's placing, which addresses these speed and IP issues.
I've yet to hear a credible argument against QBT although at the current market cap the investor community is obviously deeply sceptical.
FG:
'We are in VERY ADVANCED DISCUSSION with most of the big mining players in North America.' I think that is the first time FG has used the words 'very advanced'.
'Because we have now defined this software service architecture which is THE SOLUTION to provide/supply our technology to these big players.' This suggests QBT have cracked the latency (speed) and IP issues in agreement with the large NA miners. It wouldn't be a 'solution' if QBT liked the SaaS approach - supported by their own servers located near the miners - but the miners didn't.
Good comments.
There have been quite a few comparisons to a possible ARB type share price rise. But there is a fundamental difference between ARB and QBT’s end games. ARB was always going to face the hard hard slog of having to buy ever more and ever newer mining rigs to scale successfully. The difficulty ( impossibility?) of doing this meant their share price was always likely to come down to earth.
QBT’s end game is the opposite: a quantum algorithm which will enable mining so much faster than current classical computing mining that they could buy just one single quantum computer and ‘own’ all bitcoin mining.
Very reasonable comments and questions, but:
Method B has until now been in development. Whether QBT or a third party owned the rigs, wouldn’t have changed that. Bitmain’s machines have only just been reverse engineered to allow Method B to work on them.
QBT could have bought second hand Intel machines and used their half developed software on them but, my guess, thought they’d be better off finishing development given their limited resources.
Any analysis of the software industry shows the most successful players leave CAPEX investment to their customers whenever possible. QBT is now a SaaS company. Let the ARBs of this world spend 100s of millions in CAPEX. Assuming Method B works as well as presented, it’s a no brainer for miners. But even Method B will only make mining a good business rather than a great business.
Er, that's the whole point to Machine Learning, it learns. I 'd be concerned if Method B didn't improve between Nov 2022 and May 2023.
As for your suggestion that QBT are comparing their 2.6 improvement to obsolete equipment, the RNS specifically states comparison to typical mining machines in use during the testing.
Er, back in the real world, the PrimaryBid app is their's not Beacon's. And it works.
Probably Beacon will announce the placing price today or early tomorrow, so allowing PrimaryBid users a bit of time to decide whether to apply. Not sure PrimaryBid is the right platform to raise for a small cap without specifying the price per share.
PrimaryBid was only ever likely to be a modest percentage of the money raised. More likely the bigger backers will be like HNWIs who have done well out of top performing oil and gas stocks, e.g. RRE, in the past.
They wouldn't announce a price below where it was suspended. The market cap was £ 2.5m pre deal. No board would go to all the effort of sourcing a deal with potential reserves of tens of millions of barrels just to destroy share holder value.
The whole point was to add value by doing a deal.
If the share is 1.2p as suggested by some today then that's £30m post raise. Sounds about right to me. If they want to consolidate at 10:1 then 12p.
Why would investors invest at a £30m post money cap ?
Well there's the German asset which sounds very promising but probably much more relevant, the other thing. Clue is AA.
Can you give us the dates you have your therapy sessions and how well they are working?
Then we can produce a schedule.
Thanks. Hopefully if the demand is there the gov will increase allowances. With the huge new steel plant under construction and the intention to supply it with local inputs they're going to increase transport and water access.
Anyone have a view on tonnes a few years out? From memory CGO had been targeting 300,000 tonnes of coke in 2023.
With B2 Block resources of 700,000,000 tonnes or more then could CGO just keep expanding? Dependent on demand and transport. 1 or 2 million tonnes a year if demanded by 2025?
Agreed Helx2 about BIDS. But would anyone actually pay these guys to deramp ? I'm pretty sure they are either people with borderline personality disorders or city spivs hoping to profit PA.
Yes even if we just take the $ 84bn increase and assume only 50% of that is targetable by BIDS due to geography, then even if BIDS only gets 1% of this $ 42bn increase it could rise with the current share count by 30 times.
$ 420 m times 30% margin less ( by then say) $ 25m annual opex = 35 times on a EBITDA multiple of 10.
To put the ad revenue in perspective, Google + Youtube alone generate over $ 250bn a year.
3 reasons why the share is doing badly:
1. Most UK based PIs know of the Bidstack story. Those that like it have already bought. Not many new buyers just tired sellers who have suffered losses on other shares they own this year. Also spreadbets are often used, which being leveraged ensure many PIs are unable to continue running a losing position.
2. Bidstack will (almost certainly) need to raise money. They can't allow their cash balance to get too low or they will be seen as a business risk to their partners - game studios etc. They will need to raise money in advance. Typically companies like a 12 to 18 month cash runway. So a cash raise will probably come soon. Remember cash coming in from Azerion may be delayed. Adverts are shown through Bidstack's tech. Advertisers then pay ( the Trade Desk or similar when programmatic who then pay) Azerion who then pay Bidstack. So Bidstack need working capital to pay the wages and bridge this, likely to be several month, time gap.
3. To raise cash, many companies even possibly including Bidstack, have to do 2 things. Convince potential insitutional investors of the merits of the company. Probably not difficult in Bidstack's case as the business seems to be doing well in terms of more games publishers, Azerion, IAB, etc. But importantly many companies raising money, and I have no idea if Bidstack is one of them, are also encouraged to offer individual allocations to city employees so as to increase the likelihood of a warm welcome for the shares post the capital raise. It may be that some of the negative posters on BBs are city employees seeking a good entry point i.e. a lower capital raise share price for their possible individual share allocation.
2 reasons why the share (post capital raise) might do well:
1. Bidstack has and is making considerable business progress. New game studios being signed up each week. Azerion. IAB. Most LSE readers know all this stuff.
2. Bidstack only has to win a very modest percentage of in game advertising to the 3 billion global gamers to increase in value anywhere between 10 to 100 times over the next 5 years.
I'm not qualified to give advice, but always sensible to make sure one's spreadbet account is adequately funded and fatigue doesn't make one sell a share for no other reason.
As ever just IMHO. Do your own research.
And me viable. Thanks for all your research.
I'm thinking 10,000 boed by end of year maybe possible depending on rig availability. 6 new wells at similar 1,000+ boed IP.
Then factor in some decline. Maybe too optimistic but maybe not.
A total guess but maybe Chariot will do a deal with Delek or other.
Say Chariot get 20% of an existing gas field. Cash flow $50m a year. 8 year field life.
Counterparty get 25% of Anchois development. Have to pay for 75% of field cost.
Good for Chariot. They get $50m a year to pay for their small share of Anchois capital costs, renewable projects, Rissana exploration, etc.
Good for counterparty. They get big reserves at a modest cost per boe.
Just speculating from the new presentation and talk of a new gas venture and its timing.
Wouldn't be bad for Chariot. No more fundraises needed. A profitable producer for the next 2 years before Anchois begins production.
I don't think you can crack SHA-256. At best advanced quantum computers may be able to run the 'guesses' so much faster than current conventional computers that it might look as if they can 'crack' it.
What you can do is try to ignore some of the SHA-256 algorithm. This will reduce your chance of guessing the correct answer at each guess attempt. But if it allows you to make individual guesses quicker then overall it could be worthwhile. So if you reduce the chance of any guess being correct by 20% but each guess can be made 30% quicker then you are net 10% faster.
Even that is only a small part of what QBT are trying to do.