A start-up company, MagiQ Technologies, plans to announce today a cryptogaphy - or code - system that uses a technology called quantum key distribution to thwart eavesdropping on a fiber optic communication channel. The company, based in New York, says it has a working model of its system and will have a commercial version available in the second half of next year.
With the system, keys to the code are transmitted as a stream of photons, sent over a fiber optic cable. Because of the properties of quantum physics, the mere act of observing the transmission would alter the photons, rendering their information useless to any eavesdroppers.
A limit of the system is that it would not work on the Internet, only over dedicated fiber cables in which the photon transmission can be carefully controlled. But outside researchers say that quantum cryptography does make possible electronic conversations that would be immune to eavesdropping.
"MagiQ seems to be ahead of the research community in terms of making this affordable and practical," said Dr. Burton S. Kaliski Jr., the chief scientist of RSA Laboratories, one of the leading developers of conventional cryptographic systems.
Research in quantum cryptography goes back into the 1980's. But MagiQ (pronounced as magic) and a Swiss competitor, ID Quantique, are the first to attempt to develop commercial systems based on the technology. ID Quantique's system has not yet reached the market.
MagiQ was founded in 1999 by Robert Gelfond, a former securities trading executive for D. E. Shaw & Company who was also a first-round investor in Amazon.
The company has raised $6.9 million from investors who include Amazon's founder, Jeff Bezos; Walter Riley, the chairman of Guaranteed Overnight Delivery; and Neal Goldman, the president of Goldman Capital Management.
Industry analysts say that military applications would probably be the primary use for quantum cryptography. "The Defense Department is going to care, and that's big money for a small start-up to survive on," said Laura Koetzle, a computer security analyst at Forrester Research.
MagiQ also plans to explore other commercial applications from quantum physics, including quantum computing. Some scientists predict that computers based on quantum principle are possible and will be able to perform specialized tasks far more quickly than computers can.
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