With data theft at almost pandemic levels, you'd think there'd be a better way for businesses to securely transmit information, like customers' Social Security numbers.

Turns out there is--or, at least, there will be. IBM is developing encryption technology that uses principles of quantum physics to foil packet sniffers, hackers who intercept information as it travels across computer networks. IBM's approach is to make the data elements that move through fiber optic lines as small as physically possible by reducing them to a single photon.

Once in that quantum state, the data becomes subject to the "spooky action" that occurs among quantum particles at a distance from one another, as Albert Einstein originally described it. IBM's technology relies on a feedback loop between the photons, since the state of one photon influences that of others, even when they're separated by great distances. Therefore, if a packet sniffer diverts even a single photon onto his own system, the whole message chain shuts down automatically, killing the transmission. "It makes it literally impossible for the eavesdropper to capture any meaningful data," IBM researcher Dr. David DiVincenzo says.

A quantum encryption system would require specialized sending and receiving technology on systems at each end of a network, "but it's nothing that wouldn't fit on a circuit board," DiVincenzo says. He estimates that commercial quantum-based computing systems are at least 10 years away; IBM has no immediate plans for its quantum encryption technology. But, DiVincenzo says, "it's coming, and we need to be ready."

Others are getting ready, too. Technicians at Northwestern University are working on a system that would send more than one photon at a time to achieve faster transmission speeds. Speed and distance limitations have to be overcome before quantum encryption becomes commercially viable.

Another group, led by privately held Acadia Optronics, along with the U.S. Defense Advanced Research Projects Agency and the National Institute of Standards and Technology, says it has made strides in speed and distance by amplifying the photon signal. The group's experimental quantum cryptography system works at speeds up to 1 Mbps--the fastest currently in existence.

Says Eric Maiwald, an analyst at the Burton Group: "Quantum encryption's practical application still has hurdles, but it's beyond the theoretical."