ABSTRACT Quantum cryptography is the only system for key generation that can provably not be tampered by an eavesdropper without being noticed. While its theoretical basis is already reasonably well understood, commercial application is hampered by the lack of ready-to-use embedded encryption systems. In this paper we will describe our hardware solution, developed for setting up an application oriented quantum cryptography embedded-system. QUANTUM CRYPTOGRAPHY Quantum cryptography was born in the late 60's and its intense theoretical treatment began in the 80's and lasts until now. Since then -particularly in the last decade -a huge number of papers dedicated to all aspects of quantum cryptography have been published. A good overview of quantum cryptography can be found in The first experimental realisation was reported in 1989 by C.H. Bennet et al from IBM Research. A detailed description of the first experiments can be found in Motivation (Why Quantum Cryptography?) In spite of the intense interest of researchers around the globe and especially scientists in the USA and Europe, quantum cryptography did not seem to make any essential progress with respect to commercialisation. Different causes can be identified for explanation of this fact, but the main reason was the lack of a pronounced market need. The situation has changed in the last few years. The emerging requirements for technologies stronger than public key cryptography are related to the ever-increasing availability of computing power and the expected advent of quantum computers in the next decade. Quantum computers in particular will render the public key infrastructure paradigm vulnerable, because they will be capable to decrypt in real-time secrets encoded with asymmetric cryptography. Another aspect, which also calls for stronger encryption techniques, is the presence of the global surveillance network ECHELON, maintained by the USA and its allies. (See the EC parliament report [3] for details.) It is proven, that ECHELON was not only used for politically driven espionage, but also for economic one and it has in several occasions caused drastic damages to the European economy. The quoted EC parliament report Principles of Quantum Key Distribution Quantum cryptography uses quantum mechanical effects for simultaneous generation of identical and absolutely random bit sequences at two distinct locations. These sequences are principally not accessible to a third party trying to tamper the procedure and, therefore, they can be used as keys for subsequent encryption. That's why this technology is also often referred to as Quantum Key Distribution (QKD). To operate QKD, on the one hand, a direct optical link between the two peers generating the key is required. This link can be either established through a dedicated optical fiber or through a free space line-of-sight connection. On the other hand a channel for public communication is needed, which can be a traditional network connection. The maximum distance, which can be bridged by a practical QKD system is currently limited to 20-100 km due to the unavoidable absorption and noise on the quantum channel. The maximum distance also depends on the method employed, the level of security desired and the expected performance in bits per second
