[Greg Marra]

You can see they have created banded disks that are attached to the motors that drive the cube. Using simple ("bright" or "no bright") sensors like the banner sensor that has been in the KOP in the past, they scan the cube's configuration. This is why all the sides rotate, then it stops and thinks for a while. It is deciding how the cube is set up, and how to best solve it. The algorithms to do so have already been developed by other mathematicians, so they just had to implement them.

At least, that's what I am guessing from the video.