A New Era For Quantum Encryption
Encryption of transmitted data is an ever-growing concern as more and more critical functions are dependent on safe and secure data links. In the context of military, diplomatic, or even business data, secure does not only mean ensuring that no one accesses the data but also to be able to know if any third party is even trying to eavesdrop.
This is something that quantum encryption is specifically designed to do, with any interference being automatically detected thanks to fundamental rules of quantum physics (see below).
However, managing the long-distance transmission of quantum encryption has historically been challenging, limiting the usefulness of the technology.
This is apparently a problem of the past, as Chinese researchers have managed to create a 12,900 km (8,000 miles) quantum satellite link between China and South Africa.
This achievement was achieved through a massive collaborative effort bringing together researchers at the Hefei National Laboratory, Chinese Academy of Sciences, Jinan Institute of Quantum Technology, Beijing Electronics Science and Technology Institute, Stellenbosch University (South Africa), CAS Quantum Network Co. Ltd, and Quantum CTek Co. Ltd.
These results were published in Nature1, under the title “Microsatellite-based real-time quantum key distribution”.
Quantum Encryption Explained
Quantum encryption, or quantum key distribution (QKD), is not an encryption that relies on quantum computing capacities (this would be called quantum cryptography).
What quantum encryption does is generate encryption keys to provide confidentiality, using single photons to transfer and encode the keys.
What makes the technique unique is that single photons cannot be intercepted, copied, or measured without altering their quantum states. It is something absolutely impossible to change, as it is a hard rule that observation of quantum particles will lead to their characteristics changing.
Source: Quside
As a result, it is certain for the two communicating users to be sure that no one is even trying to access the key, even less managed to do so.
This makes the technique a very powerful option for important secure data transmissions, especially for national security purposes.
This is not a new idea, as the concept is based on work from 1984, but it is only now being deployed at scale. The method does not actually transfer data but is just the key to decrypt data transmitted through usual means.
(Previous) Limits Of Quantum Encryption
Until now, quantum encryption required a very elaborate set of dedicated infrastructure, with dedicated optical fibers.
This is a domain where China is leading, with a 2,000 km terrestrial fiber-based quantum network connecting 32 trusted nodes across major cities, from Beijing to Shanghai. This previous project was conducted under the guidance of renowned quantum physicist Prof Jian-Wei Pan, one of the leaders of this latest development in quantum encryption.
This approach differs radically from the American one, with the NSA preferring alternative technologies.
NSA views quantum-resistant (or post-quantum) cryptography as a more cost-effective and easily maintained solution than quantum key distribution. For all of these reasons, NSA does not support the usage of QKD or QC to protect communications in National Security Systems and does not anticipate certifying or approving any QKD or QC security products for usage by NSS customers unless these limitations are overcome.
Overall, quantum encryption is highly hardware-based and inflexible, and cannot be implemented in software or as a service on a network. This also makes its integration into other networks, or upgrades difficult.
Moving Quantum Encryption To Space
Building On Past Efforts
This limitation linked to the optical fiber network, a massive infrastructure project, is being lifted by moving toward satellite-based quantum encryption instead.
The first step was an experimental setup from the project Quantum Experiments at Space Scale (QUESS). It included the satellite Micius (Chinese: 墨子), in collaboration with the University of Vienna.
Micius previously managed 7,600 km of satellite-based intercontinental quantum links, with assistance from a laser communications experiment on the Chinese Tiangong-2 space laboratory module (the Chinese space station).
This was a good way to demonstrate the concept was even possible. However, this prototype has yet to prove that it could be done with elements needed for a practical deployment: small, lightweight satellites, portable ground stations, and real-time secure key exchange.
The South African side of this study was led by Pr. Francesco Petruccione, who developed one of the world’s first fiber-optic quantum communication networks in Durban, South Africa.
Source: Stellenbosch University
“This successful demonstration of quantum satellite technology firmly positions South Africa as a significant player in the rapidly evolving global quantum technology ecosystem.
Pr. Francesco Petruccione
The Advantage Of Satellites Communications
The biggest advantage of using satellites for this sort of encrypted communication is that it is not reliant on a preexisting and dedicated optical fiber network.
This allows the system to be widely deployed instead of just limited to an expensive and only domestic system of optic fibers.
An extra bonus is that this technological feat was achieved by using only micro-satellites with a payload of only 23 kg (50 pounds). For reference, the somewhat small Starlink satellites are weighing 800kg (1,760 pounds) each.
Source: Reuters
So, it would be very easy to deploy a massive constellation of these devices without many orbital launches.
The portable ground station weighs about 100 kilograms, which makes them easy to transport and implement anywhere.
Limitations of Satellite Communications
Because the communication relies on photons, it is highly dependent on weather conditions. Cloudy days, or even when the satellite is aligned with the Sun, can hinder the process.
So, most likely, this is not a technology that can be used in any conditions all the time. It is nevertheless an impressive achievement. And potentially, the use of photons in other frequencies less affected by the weather (like microwaves) could be a logical next step to implement.
How Well Did It Work?
The climate impact of this technology was one reason for picking Stellenbosch, with its ideal environmental conditions of clear skies and low humidity. In these conditions, the sharing of up to 1.07 million bits of secure keys was achieved during a single satellite pass.
The communication was also bidirectional, allowing for secure communication in real-time. So this is a success that solved all the previous limitations of the Micius prototype, including the weight of the satellite and station useful real-time exchanges.
Another thing the system demonstrates is that it can transfer one-time pad encryption of images. So even if at a later date, the quantum encryption cannot be transferred, like with bad weather, once the key has been transferred, data could still be decrypted, despite the 12,900 kilometers distance.
Applications
The first applications are likely for national security and military applications, as these are the foremost consumers of unbreakable, highly-secured encryption services.
However, this should not be the end point of this technology. A large constellation of satellites could perform the transfer of the encryption keys for commercial consumers as well. This can include tech companies, financial firms, crypto exchanges, etc.
However, this level of security is, for now, unlikely to be used by most Internet users, as it will still be very technical and more expensive than other encryption methods.
The quantum encryption market is expected to grow by an astonishing 38.3% from 2024 to 2030, from $518M.
Source: Grand View Research
Overall, this means that a new and ubiquitous layer of space telecommunication could be added soon, not one of broadband Internet like Starlink, but point-to-point, impossible-to-spy-on secure encryption.
As this network only transfers the encryption key, not actual data, it could be a powerful way to improve the safety of encryption of satellite telecommunications.
The next step will also be testing geostationary satellites, as this would radically improve the transfer rate of encryption keys.
It would also make more sense in the long term for a commercial system, as ultra-low latency linked to low-Earth orbit is not so required for quantum encryption.
Quantum Encryption Company
Arqit Quantum Inc
Arqit Quantum Inc. (ARQQ -4.37%)
Arquit is a supplier of a “quantum-safe symmetric key agreement encryption platform”.
In simpler terms, devices that provide encryption that is safe from progress in quantum computing progress.
The company’s products are compliant with NSA standards, as well as many other cybersecurity and cryptographic standards.
Arquit’s clients include most of the largest cybersecurity and network companies, including Fortinet, Juniper Network, Intel, Adtran, etc.
The associated software can be integrated with most OEM (Original Equipment Manufacturer) vendors and is cloud-based.
Source: Arquit
This technology is recognized by the industry as a leader in encryption quality, having won the National Cyber Awards and Cyber Security Software Company of the Year Award at the Cyber Security Awards. It also won the CTO Outstanding Technology Award for secure 5G solution at the Mobile World Congress.
Despite an impressive roster of clients, partners, and awards, Arquit is still very much a new company, with only $293,000 in revenues in 2024.
This is, however, not reflecting the true value of the company, as it expects contracts in the tens of millions to come from government and private companies in the near future:
Most contracts were limited licenses for demonstration and integration testing of Arqit’s symmetric key agreement software.
As previously announced, Arqit was awarded a multi-year enterprise license contract in the EMEA region for a government end user that is expected to result in seven figures in annual recurring revenue in total. Prior to the end of the 2024 fiscal year, the contract was finalized. Revenue generation is expected to commence in the current fiscal period.
Similarly, Sparkle launched in 2024 its “Network as a Service (NaaS) Product Suite with Quantum-Safe over Internet“, using Arquit products.
Together with a cash position of $18.7M at the end of 2024, the upcoming contracts put Arquit in a position to soon evolve from its status as a pre-revenue startup, justifying its 9-digit valuation.
Latest on Arqit Quantum Inc.
Study Reference:
1. Li, Y., Cai, WQ., Ren, JG. et al. Microsatellite-based real-time quantum key distribution. Nature (2025). https://doi.org/10.1038/s41586-025-08739-z