Startup Quantum Xchange today said it has raised $10 million in a seed funding round timed to coincide with the launch of the first-ever quantum fiber optic network in the U.S.

The network is designed to protect data in transmission from attacks powered by quantum computers.

The $10 million funding round, led by New Technology Ventures with participation from Enterprise Management Associates, will be used to finance the deployment of a “dark fiber quantum network” that will connect the U.S.’s Northeast Corridor from Washington D.C. to Boston.

Quantum Xchange’s fiber optic quantum network will be used to power the company’s commercial Quantum Key Distribution service, which is designed to address shortcomings inherent in present-day encryption standards that could be exposed by the imminent arrival of quantum computers.

The startup argued that the emergence of quantum computers, which will be capable of vastly more powerful computations than today’s computers, threatens to expose massive amounts of currently secure data. The problem is that most confidential data today is secured using a protocol called Secure Socket Layer encryption, which is rooted in mathematical algorithms that will be all too easy to solve by tomorrow’s quantum computers.

“The arrival of quantum computers will arm nefarious actors with machines powerful enough to crack the toughest Internet security ciphers in just seconds,” Quantum Xchange officials said.

To defend against attacks from quantum computers, Quantum Xchange said, it’s necessary to use the same kinds of technologies. The company’s Quantum key distribution system works by leveraging the fundamental properties of quantum mechanics, using light photons instead of prime numbers to exchange encrypted data between two entities. It essentially scrambles a message using the quantum properties of a photon (such as its spin state) as a key, and the message is then sent over a traditional, nonquantum channel.

The exchange is safeguarded by two “Trusted Nodes,” which are system endpoints located within common secure housing. Within each node, key information is protected by encryption with locally-generated keys and a secure boundary that prevents tampering, corruption or cloning of the keys. The result is “unbreakable encryption,” the company claimed.

Diagram showing how Quantum Xchange’s network safeguards data in transmission

Quantum Xchange said its first QKD network is being built to connect Wall Street’s financial markets with back-office operations based in New Jersey. It’s designed for banks and other financial institutions that need to ensure their data is safe and secure.

The QKD service is offered on a subscription service basis for unlimited use of its keys, with pricing packages available for one, three and five years.

Images: Quantum Xchange