Quantum cryptography, a technology that uses photons to encrypt communications over fiber-optic lines and the air, is starting to come out of the laboratory and into commercial use.

MagiQ Technologies recently began selling the world's first commercially available point-to-point quantum-crypto box. Separately, a Swiss company called Id Quantique will start pilot tests of its encryptor with banks and other businesses. Both companies' boxes start at $50,000.

"We are confident there will be a market, but the question is: How long will it take to grow?" says Grigoire Ribordy, founder of Id Quantique.

The technology has been in the works for two decades and has received considerable financial backing from the U.S. military. Supporters say quantum cryptography will make cracking datastreams more difficult than ever, in part because it makes possible the changing of encryption keys - such as those based on Triple-DES or Advanced Encryption Standard - at the dizzying speed of about 100 times per second. This so-called quantum-key distribution method is potentially a better way to exchange keys for point-to-point encryption than what is offered in current symmetric-key technologies. Quantum crypto also automatically detects when anyone is trying to eavesdrop on a communications stream.

"With quantum key distribution there's no way of breaking the key," says Charles Bennett, IBM research staff member and IBM fellow. He invented the basic quantum crypto technology, called BB84, with colleague Gilles Brassard of the University of Montreal, back in 1984. "It differs from the more ordinary methods, such as Diffie-Hellman Factoring."

Despite such advances, the technology has its challenges, including distance limitations.

Id Quantique's encryption/decryption unit, dubbed the ID500 (it features optical phase modulators, couplers, single-photon detectors and diodes), is limited to less than 62 miles before the photons performing the encryption lose their force over a fiber-optic line. "For the first pilot tests, we'll only go a few kilometers," Ribordy says.

MagiQ's QPN gateway also has distance issues, which the company tackles by adding a repeater after 74 miles "to regenerate the photon amplification," says Andrew Hand, vice president of business development. The box is limited to encryption at 100M bit/sec, although the company hopes to push that to 10G bit/sec.