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Global Race to develop ultra-secure Quantum networks for financial, government and Military

Today much of modern society depends on cryptography to provide security services including confidentiality, integrity, authentication, and non-repudiation. However current cryptographic algorithms are vulnerable to the progress of computing technology, development of new mathematical algorithms, and progress in quantum computing technology which could break many commonly-used asymmetric cryptographic algorithms in seconds.


Though such systems are generally thought to be unachievable before 2030, when such quantum computers are available, decrypting some communications streams may become feasible if nothing is done to protect those streams. What’s more, any encrypted data that has been intercepted and stored will be vulnerable to decryption. That means any country that attains a quantum computing system of sufficient power in the future will be able to decrypt stored data from the current era that would otherwise remain impossible to decode. And the data at risk goes beyond national-security information to include genomic, medical, and financial data.


Quantum cryptography is an emerging technology in which two parties may simultaneously generate shared, secret cryptographic key material using the transmission of quantum states of light. A unique aspect of quantum cryptography is that Heisenberg’s uncertainty principle ensures that if Eve attempts to intercept and measure Alice’s quantum transmissions, her activities must produce an irreversible change in the quantum states that are retransmitted to Bob. These changes will introduce an anomalously high error rate in the transmissions between Alice and Bob, allowing them to detect the attempted eavesdropping.


The guaranteed secrecy of QKD systems threatens to make it impossible to spy on communication channels use by adversary countries. Whether these are channels that are already tapped, or ones that would be useful to tap in the future, improvements in communication security can potentially cut off information that might be useful in statecraft or to gain advantage in a military crisis.


QKD is suitable for use in any key distribution application that has high security requirements including financial transactions, electoral communications, law enforcement, government, and military applications. Military is also transitioning to Quantum cryptography to takes advantage of the properties of matter in addition to the principles of mathematics to create a cryptosystem that cannot be broken with unlimited computing power (even with a quantum computer).


Current limitations of QKD are high cost of dedicated hardware, transmission distance limited to few tens of kilometres, and low key transmission rate. However, for many applications for which strong security conditions must be met, QKD will likely become an increasingly attractive option in the upcoming years. Now the technology is sufficiently mature to move to practical deployments. QKD is now about going over longer distances and cutting the costs. As well as being used on Earth it is also being tested in space and with drones. The goal is to have a fully functional constellation of satellites, not just one.


The Chinese government has created a 1,240-mile QKD-protected link between Beijing and Shanghai. It’s also demonstrated the ability to use QKD to transmit and receive messages from a satellite. In 2019, a team of Chinese technicians, engineers, and scientists sent pairs of photons from a single satellite called Micius to two ground stations in China separated by over 1,120 kilometers. The photons were prepared in such a way that they carried information that remained perfectly correlated in spite of the distance between them. In addition, the two receiving stations in China were able to ensure that the two receivers could not be disrupted or deceived by any third party. The experiment demonstrated the ability to share secret cryptographic keys between the two locations in China, with no known means for a third party to covertly observe or copy them. Although the rate of the key exchange was too low for practical use, the achievement represented a step toward secret communications guaranteed by the laws of physics. China also carried the first intercontinental video call that was completely “unhackable,” with surveillance or eavesdropping immediately detected due to the effect that measurement would have on the quantum particles.


While China has a head start other countries are starting to catch up. QKD research and development continues today, as part of broader developments in quantum technologies in Canada, the European Union, South Korea, Japan, the United Kingdom, the United States, Russia, China and other countries.


Especially when the technology miniaturizes enough so that it can be put on cubesats, which would cost around a million to launch instead of a billion for a dedicated satellite. With Europe’s ten-year flagship research program now officially under way, and plans for a similar US effort passed by Congress, the global race to develop quantum technology has moved up a gear.


Governments may soon race to test out quantum theory in orbit, and eventually build a “quantum internet,” which will give rise to new kinds of coding and allow for faster-than-light communication — possibilities that have powerful appeal for government agencies and the private sector alike.


And a half-dozen QKD startups are pitching other kinds of clients. Qubitekk Inc., a startup in Southern California, has a U.S. Department of Energy contract for a pilot project to secure the communications that help operate power stations. Telecommunications giants including the U.K.’s BT Group Plc and Japan’s NTT Corp. say they’re considering whether to build the protection into their network infrastructure.


South Korea Telecom and ID Quantique have worked through the International Telecommunications Union to establish standards for quantum communications tools. The competition to help set standards is perhaps as consequential in this field as is any particular technological development. Companies that can adapt to voluntary international standards for technical devices and data can establish a market advantage as other companies and countries around the world begin to integrate that technology into their own infrastructure.


 Commercial QKD systems

QKD is slowly but steadily moving from labs to commercial implementation. The Chinese government has started adopting it. China is also trying to make quantum link over a distance of 2000 km on the ground between Shanghai and Beijing. Various startups are already active in this area and one of them, ID Quantique has actually deployed several QKD networks including one in Soccer World Cup held in South Africa in 2010. Even established companies e.g. Toshiba, Symantec etc. are working on QKD. The global quantum cryptography communications market will grow to be worth $24.75 billion in 2025, according to Market Research Media.


QKD systems have now entered into commercial domain. Commercial QKD systems are available from sellers in Europe (ID Quantique; SeQureNet), Australia (Quintessence Labs), North America (MagiQ) and Asia (Quantum Communication Technology Co., Ltd.). In 2014, Los Alamos National Laboratory licensed the results of their 20 years of quantum cryptography research to Whitewood Encryption Systems, Inc. to create quantum-based random number generators and encryption systems.


SK Telecom has applied its quantum-safe system to Deutsche Telekom’s trial network, the company has announced. The South Korean telco’s quantum-safe system consists of quantum key distribution, quantum random number generator, and an operating system. The company said it will apply the security system to parts of its German counterpart’s commercial network by 2019 and collaborate on businesses in Europe. SK Telecom also clinched a 10 billion won ($8.9 million) deal with the US’s QuantumXchange to supply its quantum safe system.


QKD has limits. It can protect data only in transit, not when it’s at rest, stored in data centers or on hard drives. And because fiber-optic cabling itself absorbs some light, a single photon can travel only so far. Scientists have pushed the boundary ever outward, as far as 260 miles in lab experiments. Yet for high-speed transmissions under real-world conditions, the record is just 60 miles. Farther transmissions require a series of “trusted nodes,” relays that are themselves vulnerable to hackers or physical tapping. China uses armed guards to secure the nodes in its 1,240-mile QKD network, says Anthony Lawrence, a former NSA network security expert and briefing officer who now runs cybersecurity startup Vor Technology LLC

QKD networks

Currently Most Quantum Communication links are direct point-to-point links through telecom optical fibers and, ultimately limited to about 300-500 km due to losses in the fiber. Other factors are high background noise of practical single-photon detectors, BER rates caused by microscopic impurities in the fiber and inefficient finite-key security analysis.


The next important milestone, is development of large scale QKD network to extend QKD from point-to-point configuration to multi-user and large-scale scenario. Based on the passive beam splitter, Townsend et al. presented and realized the first QKD network. Overcoming this limit is a grand challenge; it will require quantum repeaters, entanglement swapping, and multimode quantum memories. The latter, namely storing and retrieving single-photons on demand in quantum memories with long quantum coherence times, is the most challenging step in this endeavor.


China has launched the world’s longest quantum-communications network, which includes a 2,000-kilometre link between Beijing and Shanghai that is meant to safely transmit sensitive information. The line is the world’s first trunk line of secure quantum telecommunications. The Jing-Hu (Beijing-Shanghai) Trunk Line connects Beijing, Jinan, Hefei and Shanghai. The line is connected with the world’s first quantum satellite, which was launched by


However, in June 2017, China demonstrated entanglement using a special satellite between 2 cities 700 miles apart. The satellite created a pair of entangled particles which were beamed to 2 different ground-based stations. The advantage of using a satellite is that the particles of light travel through space for much of their journey and hence less likely to et disturbed. The quantum communication satellite is connected to the Shanghai-Beijing line via a station in Beijing enabling the space-to-Earth quantum communication network.


In Jan 2021 it was reported that Chinese scientists have established the world’s first integrated quantum communication network, combining over 700 optical fibers on the ground with two ground-to-satellite links to achieve quantum key distribution over a total distance of 4,600 kilometers for users across the country. The team, led by Jianwei Pan, Yuao Chen, Chengzhi Peng from the University of Science and Technology of China in Hefei, reported in Nature their latest advances towards the global, practical application of such a network for future communications.

Using trusted relays, the ground-based fiber network and the satellite-to-ground links were integrated to serve more than 150 industrial users across China, including state and local banks, municipal power grids, and e-government websites. “Our work shows that quantum communication technology is sufficiently mature for large-scale practical applications,” said Jianwei Pan, Professor of USTC. Similarly, a global quantum communication network can be established if national quantum networks from different countries are combined, and if universities, institutions and companies come together to standardize related protocols, hardware, etc., he added.


By 2030, the Chinese network would be extended worldwide, the South China Morning Post reported. It would make the country the first major power to publish a detailed schedule to put the technology into extensive, large-scale use.


It’s likely the technology initially will be used to transmit sensitive diplomatic, government policy and military information. Future applications could include secure transmissions of personal and financial data, Xinhua reported. Although the Chinese government has not revealed the projects budget, scientists told state media that the construction cost would be ¥100m (£10.17m) for every 10,000 users, according to the South China Morning Post.



Sberbank became the first company to receive the new quantum protection system, developed by the Moscow-based Russian Quantum Center (RQC). According to RQC general-director Ruslan Yunusov, the service is now ready for widespread use by companies and organizations.


Thanks to quantum communication technology, we have provided for a high frequency of key generation, thus dramatically increasing the level of data protection. Russian organizations will get the opportunity to use a system created in our own country to protect their information, which is important for the state,” Yunusov said.


The special, 25 km-long line between Sberbank’s central office and a branch near the city center is protected via the phenomenon of quantum entanglement.  The Russian Federal Security Service intends significantly strengthen the level of security of Russian cyberspace by 2020, to be achieved by establishing production of new electronic components based on ‘new physical principles and materials.’ These will be primarily be supplied to meet the requirements of state agencies, large state corporations, the country’s energy and other critical infrastructure, which are seen as the targets most vulnerable to hacker attacks.


The official spokesperson for Alexander Bortnikov, head of the Russian Federal Security Service, says that the new technology components will be based on quantum computing and quantum communication technology designed by Russian academic Kamil Valiev back in the 1980s. These technologies were described as being characterised by ‘absolute reconnaissance protection and immunity to capture.’


Russian Railways has developed the Quantum Communications Development Roadmap and submitted the draft paper to the Russian Government for approval, the railway operator said in Aug 2020. The roadmap comprises development of nine priority technologies and fifteen products by 2024 along with over 35 key performance indicators, such as production volumes and sales, length of quantum networks, technologies readiness level, provision of human resources and other parameters.

“The development of quantum communications technology will allow the creation of a comprehensive secure infrastructure for the digital economy, a public administration system, which is especially important given the modern threats to information security,” says RZD deputy general director and chief engineer, Mr Sergey Kobzev. RZD says the first tests on its infrastructure showed there was a possibility of building highly secure national and regional networks based on advanced Russian quantum communication technologies.



The UK’s first quantum network was launched in June 2018 in Cambridge, enabling ‘unhackable’ communications, made secure by the laws of physics, between three sites around the city. The ‘metro’ network provides secure quantum communications between the Electrical Engineering Division at West Cambridge, the Department of Engineering in the city centre and Toshiba Research Europe Ltd (TREL) on the Cambridge Science Park.


Researchers have been testing the ultra-secure network for the last year, providing stable generation of quantum keys at rates between two and three megabits per second. These keys are used to securely encrypt data, both in transit and in storage. Performance has exceeded expectations, with the highest recorded sustained generation of keys in field trials that include encryption of data in multiple 100-gigabit channels.


“Through this network, we can further improve quantum communications technologies and interoperability, explore and develop applications and services, and also demonstrate these to potential end users and future customers,” said Professor Timothy Spiller of the University of York, and Director of the Quantum Communications Hub.


The German Federal Ministry of Education & Research (BMBF) is supporting the country’s quantum research and development revolution by investing €14.8 million in a new collaborative project called Quanten-Link-Erweiterung (“Q.Link.X”), which is scheduled to run through 2021. “The objectives are to achieve optical cable networks that are physically tap-proof,” commented Q.Link.X project consortium representative Prof. Dr. Dieter Meschede of the Institute of Applied Physics at the University of Bonn.


Transmission segments of between ten and one hundred kilometers in length are to be realized using three different technical platforms: quantum dots, diamond colour centres and a combination of atomic and ionic systems. The benefits of the respective systems are to be compared with one another. “Q.Link.X will develop for the first time a quantum repeater that will be tested on installed optical cables. This is an important step towards bringing this technology into the application phase,” said Prof. Dr. Ronald Freund, head of the Photonic Networks and Systems department at Fraunhofer HHI. The project will also investigate enhanced protocols in terms of wavelength multiplexing with additional quantum communications and classical transmission channels for existing optical cable communications networks.



In June 2018, Quantum Xchange launched the first quantum, fiber-optic network in the United States and commercial Quantum Key Distribution (QKD) service for quantum-safe data protection based on the laws of quantum physics. Leveraging the company’s Trusted Node technology, the Quantum Xchange QKD network extends the technology well beyond the previous limitations of transmission distances, to offer commercial enterprises and government entities point-to-point support over unlimited distances.


As the first commercial QKD solution in the U.S., Quantum Xchange exclusively owns the distance enhancing Trusted Node technology developed by Battelle which can extend the QKD range indefinitely using 100-mile multiples, making large-scale QKD over long distances possible and practical. The Trusted Nodes use quantum keys generated by QKD devices from ID Quantique, the Swiss leader in quantum communications, under an exclusive US licensing agreement.


“ID Quantique’s QKD solutions have been working robustly in the field, securing Swiss elections for over a decade,” said Dr. Grégoire Ribordy, CEO and Co-Founder of ID Quantique. “Other long-term customers include banks, governments and enterprises worldwide. Quantum Xchange’s model to provide end-to-end quantum keys on demand in the US will ensure easy accessibility for such customers to the highest levels of data protection, with inbuilt eavesdropping detection and forward security.”


Highly regulated, high-risk organizations, including those in banking, critical infrastructure, telecommunications, healthcare, and government are ideal candidates for Quantum Xchange’s distance enhancing QKD solution. It requires no changes to current encryption tools or protocols and can be implemented today.


In the United States, meanwhile, the U.S. firm Battelle, together with the Swiss company ID Quantique, is constructing a 400 mile link between Columbus, Ohio, and Washington, D.C..


In Sep 2020, Verizon  reported to have conducted a trial in the Washington D.C. area deploying a Quantum Key Distribution (QKD) network. The successful trial positions Verizon as one of the first carriers to pilot QKD in the U.S. Current technological breakthroughs have proven that both the quantum channel and encrypted data channel can be sent over a single optical fiber. Verizon has demonstrated this streamlined approach brings greater efficiency for practical large-scale implementation allowing keys to be securely shared over wide-ranging networks.”In the trial, video streams are encrypted and delivered more securely allowing the recipient to see the video in real-time while ensuring hackers are instantly detected. A QKD network derives cryptographic keys using the quantum properties of photons to prevent against eavesdropping. Verizon also demonstrated that data can be further secured with keys generated using a Quantum Random Number Generator (QRNG) that creates truly random numbers that can’t be predicted



The company is hoping to tap global demand for advanced cryptographic technologies as cyber security has come to the forefront of national defence. China is aggressively expanding network infrastructure for QKD, including quantum satellites that relay quantum signals. The company said it has teamed up with Verizon Communications in the United States and BT Group in Britain in pilot QKD projects, and is in talks with another telecommunications carrier in South Korea.



India has begun working on a national mission that may eventually lead to the  creation of a super-secure communication network to make online financial transactions hacking-proof besides ensuring full-proof safety of every bit of digital communication.


The government in its budget 2020 has announced a National Mission on Quantum Technologies & Applications (NM-QTA) with a total budget outlay of Rs 8000 Crore for a period of five years to be implemented by the Department of Science & Technology (DST).


“Quantum technology is opening up new frontiers in computing, communications, cyber security with wide-spread applications. It is expected that lots of commercial applications would emerge from theoretical constructs which are developing in this area. It is proposed to provide an outlay of ` 8000 crore over a period five years for the National Mission on Quantum Technologies and Applications,” she added.


Quantum technologies are rapidly developing globally with a huge disruptive potential. The next generation transformative technologies that will receive a push under this mission include quantum computers and computing, quantum communication, quantum key distribution, encryption, crypt analysis, quantum devices, quantum sensing, quantum materials, quantum clock and so on. The areas of focus for the Mission will be in fundamental science, translation, technology development, human and infrastructural resource generation, innovation and start-ups to address issues concerning national priorities.


Their applications which will receive boost include those in aero-space engineering, numerical weather prediction, simulations, securing the communications & financial transactions, cyber security, advanced manufacturing, health, agriculture, education and other important sectors with focus on creation of high skilled jobs, human resources development, start-ups & entrepreneurship leading to technology lead economic growth.


Our Quantum Key Distribution System (QKD) called Armos was launched earlier this year in March and was made deployment-ready in India as well in international markets., said Vivek Shenoy, Chief Technology Officer, QNu Labs.


QNu Labs has become the first company in India to offer quantum secure devices. In May 2021, it announced the launch of a new quantum key distribution system, which has a range of around 100 kilometers. The company also launched a quantum random number generator chip called Ikaria.


The solution is directed at addressing the growing issues around data security and privacy, which have become a fundamental concern for businesses, governments and defence organisations across the globe. Our product roadmap involves the development of Quantum Hardware Security Modules and Post Quantum Cryptography solutions, which will become the basis for critical infrastructure in the future.


The firm has deployed its solutions across sectors such as defence, telecom, banking, finance and so on. According to Vivek Shenoy, the objective of QNu Labs is to put India at the forefront of data security through a new paradigm in encrypting keys using quantum physics principles.



Military QKD Networks

Military require QKD-secured systems to connect command and control nodes throughout the communication channels, connecting commanders with their leadership through terrestrial and ground to space circuits. Satellites with onboard QKD devices could communicate globally, and distribute new keys to friendly systems located anywhere in the line of sight to the platforms. Changing the key several times a second could make it almost impossible for cyber adversaries to decrypt the communications traffic.


At least six  QKD networks transmitting quantum encryption keys have been built around the world, including one run by the US Defence Advanced Research Projects Agency in Massachusetts.


Under US Defense Advanced Research Projects Agency (DARPA), researchers from BBN Technologies, Boston University and Harvard University built the world’s first QKD network across a metropolitan area – DARPA quantum network. US are suspected to operationalize quantum networks, including a dedicated line between the White House and Pentagon in Washington, and some links between key military sites and major defense contractors and research laboratories in close proximity.


The QNu Labs, firm has carried out successful field trial of the first quantum secure link in India running between two defence locations in North India. This link was set up between two defence establishments, about 50 km apart. Two dark fibres were used, one for the quantum channel and one for clock synchronisation. Two C-DOT encryptors were used at each station that would retrieve the ultra-secure key that Armos would generate and encrypt all data flow between these two stations. This setup ran continuously and flawlessly for five days, with keys being refreshed every one minute between the routers. said Shenoy.


$45 million award for Scalable Quantum Network

A Combined team of scientists and engineers from the Army, Air Force and Navy research labs, have won a $45 million award to the Joint U.S. Service Laboratories to develop the first U.S prototype of a scalable quantum network with memory.


The three-year award is funded by the Office of the Assistant Secretary of Defense for Research and Engineering’s Applied Research for the Advancement of S&T Priorities, or ARAP, program.


Quantum-physics-based computing could increase by a billion-fold computing capability critical to accelerating the building-blocks for game-changing capabilities in command, control, communications, computers, intelligence, surveillance and reconnaissance, called C4ISR, according to the award document. The service research labs are collaborating to demonstrate the feasibility of the fully integrated quantum-memory technology.


Market growth

The global quantum cryptography market size is estimated to be USD 89 million in 2020 and projected to reach USD 214 million by 2025, at a CAGR of 19.1%. The growing incidents of cyber-attacks in the era of digitalization, increasing cybersecurity funding, rising demand of next-generation security solutions for cloud and IoT technologies, and evolving next-generation wireless network technologies are expected to drive the growth of the global quantum cryptography market.


Estimates of the annual QKD market range from $50 million to $500 million, but market researcher Global Industry Analysts Inc. says demand for QKD and related technologies may reach $2 billion by 2024. Toshiba expects the global QKD market to grow to $12 billion in 10 years with the advance of quantum computers, whose massive computational power could easily decipher conventional math-based cryptographic keys commonly used in finance, defence and health care, Reuters reported.


Market Drivers:

Digitalization offers various opportunities to optimize systems and operations across industry verticals. The increasing number of connected devices is giving rise to complexities in cyber risk management and also unwanted cyber incidents across the globe. As a result, cyber-attacks are occurring at a greater frequency and are targeting businesses and governments. Countries, including the US, Turkey, China, Brazil, Pakistan, Algeria, India, and Europe are the main targets of cyber-attackers.

  • Increasing demand for security solutions of IoT & cloud technologies as these are being used by every data company
  • Increasing need for reducing cyber-attacks in this growing era of digital crime


Market Restraints:

  • The cost of implementation of this system is very high
  • Shortage of technical expertise within the area of quantum cryptography & its technologies

Although the implementation of quantum cryptography solutions increases the safety of communication, these solutions are expensive and time-consuming to implement, and this results in less adoption of quantum cryptography solutions. Their implementation cost increases with increasing distance; thus, organizations have to pay huge charges for implementing and maintaining these solutions and services, and this becomes a burden for them. For instance, quantum cryptography systems cost around USD 50,000 to connect only two parties at a time. Therefore, high installation costs act as restraints for the growth of the quantum cryptography market.


Impact of COVID-19 on Quantum Cryptography Market

With the increase of demand for digitalization, there is a surge in demand for quantum cryptography. Companies know that data recovery is very costly nowadays, and due to COVID-19, there is an increase in the cyberattacks for which companies are buying quantum cryptography solutions to protect their data. A rise in the use of cloud-based software adoption across different industries has also increased the use of quantum cryptography solutions. Enterprises are witnessing the increasing demand for training and consulting services to ensure the effective deployment of quantum cryptography solutions in the region. Moreover, the growing establishment of security companies in the database and the services offered are also driving the encryption market.



Some are the key & emerging players are Aurea Technologies Inc,   ID Quantique (Switzerland), ISARA (Canada), QuintessenceLabs (Australia), MagiQ Technologies (US), QuantumCTek (China), Quantum XC, IBM Corporation,Infineon Technologies AG and Mitsubishi Electric Corporation, QuNu Labs of Bangalore, India; and Beijing’s QuantumCTek.





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