Viewpoint: Nations Vie for Growing Quantum Cryptography Market

By Sudip Saha

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Quantum cryptography is a technology that uses advanced physics to secure the distribution of symmetric encryption keys.

Information technology giants are working toward building quantum computers that could change the face of the modern world by giving experts across multiple sectors — including the military — access to unparalleled processing power.

Quantum cryptography is a cliff on which the balance of the world still hangs. Surging cyber attacks and threats across various industries — including IT, automotive, banking and others — have increased the need for quantum cryptography that will secure an organization’s assets. It has become imperative to protect these systems and invest in secure solutions against malicious cyber intrusions.

Integration of quantum technologies currently represents one of the most anticipated and needed advances in the defense and banking sectors. Demand for quantum cryptography is expected to increase at an exceptional 30 percent compound annual growth rate over the next decade, according to the October 2021 “Quantum Cryptography Market” report by Fact.MR, a business intelligence firm.

Quantum technologies might prove revolutionary for national security by providing secure communications, detecting aircraft and submarines and carrying out faster code breaking. However, despite the advantages that quantum cryptography provides, IT experts have warned about unprecedented challenges and drawbacks of the novel technology.

Quantum cryptography uses photons and its intrinsic properties to develop an unbreakable and secure cryptosystem.

It uses an optical link to ensure the system is highly secured against any hacking. However, quantum computing can be used today to break the encryption that secures emails, bank payments and even the WhatsApp messages that are transmitted on the internet.

Institutions such as banks and hospitals that rely on public-key encryption are considered vulnerable against cyber attacks. With the help of quantum computers, data that is floating over the internet will be rich targets for hackers.

However, physicists, IT experts and researchers are working on making quantum cryptography to thwart hackers a reality. As the stakes are very high, national leaders are keeping the processes and research under wraps, safe from the clutches of the darker parts of the internet.

Data breaches and network intrusions are becoming more frequent. The adoption of smart devices and extensive use of digital technologies have increased the number of cyber attacks. Post-quantum cryptography is the technology that will defend data against these emerging threats. Therefore, the adoption of quantum cryptography is booming in the defense sector.

Countries such as the United States, China, Russia, India and Germany are in a quantum arms race that will transform the face of the defense sector. A new era will emerge where those that have advanced military technology will come out on top. The competition to claim dominance of quantum technology has begun a new tech war among the world’s top military powers.

Some of the key providers of quantum cryptography who were also surveyed for the report are: Switzerland’s ID Quantique; Australia’s QuintessenceLabs; U.S.-based NuCrypt; China’s Qasky; London-based Crypta Labs; San Diego-based Qubitekk; Oxford, England-based Post-Quantum; Boston-based MagiQ Technologies; Canada’s ISARA; QuNu Labs of Bangalore, India; and Beijing’s QuantumCTek.

Meanwhile, China has taken huge strides in quantum cryptology by extensively investing in the technology.

For example, the U.S. military has been using stealth technology in its aircraft for decades. However, this advantage is now under threat. In November 2018, China’s Electronics Technology Group Corp., which is the nation’s largest defense electronics company, launched a prototype radar that claims it can detect stealth aircraft in flight. The radar uses quantum technology and quantum physics to detect aircrafts’ locations even in stealth mode.

This is just one of the many examples that can transform warfare. While quantum cryptography can detect platforms, it can at the same time secure battlefield communications and help submarines navigate in the oceans undetected.

Meanwhile, governments in India and China are ramping up research initiatives to develop the technology. A September 2018 study of China’s quantum strategy by the Center for a New American Security stated that the People’s Liberation Army is increasing its efforts to integrate quantum cryptography into the military by recruiting quantum specialists and setting up joint quantum lab universities.

Likewise, India has joined the quest to adopt quantum cryptography in its defense sector. The Indian government announced in its 2020 budget an outlay of $1.06 billion for a period of five years for the National Mission on Quantum Technologies and Applications, which is under the Department of Science and Technology.

Indian Finance Minister Smt. Nirmala Sitharaman in a 2020 speech stated, “Quantum technology is opening up new frontiers in computing, communications [and] cybersecurity with widespread applications.”

In September 2021, the Indian Institute of Technology-Delhi established a center of excellence focusing on quantum technologies to bring research activities up to speed. Adoption of quantum cryptography in India will give the country an economic advantage and make its defenses secure against cyber attacks, the institute hopes.

Startups seeking a piece of the burgeoning market are popping up all over the world.

Arqit, a U.K.-based quantum technology startup, recently announced that it would begin delivering and tracking quantum encryption keys via two quantum key distribution satellites that are scheduled to be launched in 2023.

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.

New advances and research in quantum cryptography have the potential to trigger a new race to supremacy. Surging interest and investment in the development of quantum cryptography across the globe will drive the applications of quantum technology over the coming decade.

Artificial Intelligence-High Performance Embedded Computing (AI-HPEC), which is part of quantum computing, may provide next-generation cruise missiles and maneuverable ballistic missiles the ability to alter course to new targets in mid-air, at any point, after launch. It could also recognize countermeasures and avoid, destroy and even misdirect the missiles.

To gain supremacy, allied militaries are likely to invest more in emerging startups as well as big companies for the development and application of quantum cryptography in the military sector. Increasing research in this field is helping countries better understand the potential and unique risks that will crop up in the defense sector.

Quantum computers also pose a threat to banking and financial institutions across the globe and they need critical security applications to shield themselves from cyber attacks and data breaches. They need to ensure real-time availability of data for applications and transactions. According to a recent study, “Cost of a Data Breach 2021,” by IBM and the Ponemon Institute, the average cost of a data breach reached $5.86 million for the financial industry.
Countries such as France, India, the United States and Germany are adopting the post-quantum cryptography technology known as “quantum key distribution” applications to secure their clients’ data from cyber theft.

Technology such as quantum vaults are being adopted as a major point in blockchain technology for the storage of digital keys.

Leading companies in the financial industry such as JP Morgan, Barclays, Visa and BBVA are monitoring the technological advancements in quantum cryptography from leading IT organizations such as Google, IonQ and IBM to help mitigate these risks.

The U.S. National Institute of Standards and Technology has tasked finance and banking companies with starting the transition from current cryptography to quantum cryptography. NIST stated it could take decades to properly transition from public-key cryptography to quantum cryptography but noted that it is essential for companies to begin preparing.

Leading financial companies such as JP Morgan have already begun audits and to check for high-risk data to verify if the company is crypto-agile for the changes to come, which is defined as an ability to smoothly transition between standards and updates as the process progresses with NIST-mandated standards.

Research by Fact.MR has shown that North America is at the forefront of quantum cryptography in defense, health care and the automation industries. Innovation and research activities for quantum cryptography to outmatch the technology of other countries have burgeoned in Canada as well as the United States.

As the next decade unfolds, it will be interesting to witness the battle for quantum supremacy between China, India, the United States and other nations. 

Sudip Saha is managing director and co-founder of Fact.MR, which tracks high-growth markets across more than eight sectors in over 100 countries. To find the report, go to https://www.factmr.com.

Topics: Emerging Technologies

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