There are only a small handful of vendors selling a new encryption system called quantum key distribution (QKD), and sources were unaware of any financial institution using it across substantial portions of its enterprise.
So what's the big deal? If widely adopted, QKD could override rapid advancements in mathematics being used by criminals to threaten tradition encryption, a development that would make common protections ineffective. QKD could also provide a practically impenetrable wall to protect electronic communication, making electronic eavesdropping virtually impossible. "The strength of quantum encryption means that if someone were trying to eavesdrop, it would be obvious," says Josh Kessler, analyst and product manager of the numbers almanac for Tower. The vast attention that data theft is getting from journalists, consumers and regulators-coupled with improvements in eavesdropping methods available to crooks-means QKD is going to be on the minds and lips of many more people, technology firms and financial institutions in the near future.
QKD is getting some limited adoption, mostly by government agencies, telecommunications and financial firms-though the providers of QKD aren't talking about who's using it and for what purpose. The new encryption, which still has some growing pains of its own that limit its use, is the result of technology advancements that are admittedly on the far and high end of the science curve. "It's confusing to talk about it," Kessler says.
Quantum distribution systems use single photons as carriers of information. At the sender's end, random number generators create two random strings of binary data. The first is the data to be sent, and the second determines a set of axes for data polarization. Because this system allows massive keys to be sent, impenetrable ciphers can be used. In English, this means the results of the distribution are unbreakable. "It allows you to encode information in a way where someone can't merely upserve and extract information," Kessler says. He says that's better than the most common current encryption protocol, the Rivest, Shamir & Adelman public key distribution. Under RSA, two large prime numbers are processed to produce private and public keys for safe transport. Kessler says a risk in this system is the product of the two primes is publicly available as a piece of the public key. If this number were factored into the two original primes, a crook-especially if he has someone like Will Hunting on his payroll-would be able to recalculate the private key as well.
Only a couple of firms are selling QKDs, including id Quantique, based in Geneva, and the New York-based MagiQ. A much larger technology firm, Tokyo-based NEC, is also expected to roll out a product sometime this year. The technology is not without weaknesses, including distance limits and expense. It costs up to $100,000 to connect two communication points, and even then those points can only be separated by about 40 miles. As such, QKD use has been limited to extremely sensitive data traveling between corporate centers.
