Random oblivious transfer: is quantum secured finance almost a reality?

Why quantum cryptography could soon play a role in our financial lives

Ten to fifteen years ago, I used to write frequently for New Scientist magazine about research progress towards quantum computing. Quantum computing would exploit the peculiar properties of the atomic world to do computation in a totally new way. It could solve some problems far more quickly than computers running on classical physics, as today's computers do. Without getting into any detail, the essential thing about quantum processes is their ability to explore many paths in parallel, rather than just doing one specific thing, which would give a quantum computer unprecedented processing power. Here's an article giving some basic information about the idea.

I finally stopped writing about quantum computing because I got, well, bored with it, not the ideas, but the achingly slow progress in bringing the idea into reality. To make a really useful quantum computer you need to harness quantum degrees of freedom, typically in the form of "qubits," quantum bits stored in photons, the spins of atoms, etc., and you need the ability to carry out controlled logic operations on them. You would need lots of qubits, say hundreds and more, to do really valuable calculations, but to date no one has managed that. My articles reporting advances in quantum information storage, in error correction, and so on, always included a weasel phrase like ".... this could be a major step towards practical quantum computing." They weren't. All of this was perfectly good, valuable physics work, but the practical computer receded into the future just as quickly as people made advances towards it.

We still don’t have a quantum computer, unless it turns out that the device made by D-Wave systems turns out to be one. An article in this month’s Nature Physics presents some recent experiments aimed at finding out, and gives a tentative “yes,” although it is clear that this device, however it works, is not doing computing by carrying out logical operations in its qubits. It does operate as a quantum system, but then, is that surprising? The evidence on whether it computes in a way that classical devices cannot remains very mixed.

But computing is only one thing you might do with quantum physics. Secure communication is another. When it comes to secure communication, the most obvious need is for safeguarding things like financial transactions. How can you exchange sensitive information with another party that you don’t trust, and still be sure you’ll be ok? It now appears that quantum technology for doing this, and that doing it in the context of real devices such as smart phones, may not be too far away.

This paper (you can find a freely accessible preprint here) recently published in Nature Communications, has demonstrated experimentally the successful operation of what you might call a “building block” for allowing fully encrypted exchange between two parties. This known in cryptography as “oblivious transfer” and is closely linked to the challenge of enabling two parties who do not know or trust one another to interact in a way that remains secure. We don’t really have this today. but we might soon(with a caveats of course).

Say you want to log in to your bank ATM using a pre-established password. Your bank doesn’t know if you are really you, and you can’t really be sure the ATM hasn’t been corrupted. The bank can use the password to make sure you are indeed you, but what about you? You face the risk that some evil party may use the ATM to learn your password when you enter it. There is no way with a simple shared password to log in securely, while also protecting yourself.

This is what random oblivious transfer achieves, in principle. Using quantum physics, it makes it possible for each party, you and the bank, to interact and verify the authenticity of the other, without actually physically exchanging any crucial information over the communications link. It’s like logging in to your bank in a secure way without having to ever enter your password. The technique is indeed complicated, and depends on the peculiarity of quantum physics. What it does, in essence, is to create a shared password between the two parties, and let each of them test that password for correctness, without that password ever being sent from one to the other. Tricky!

The caveat: it’s only safe if there aren’t other evil parties around who also have sophisticated quantum technologies, in particular things called quantum memories. Right now, the best such memories can only store quantum information reliably for a few milliseconds. So, use this technique, and make the interaction last for, say, a few seconds, and you’re guaranteed security. That might get longer in future.

How long until this becomes part of our daily lives? Technology isn’t easy to predict. So I’d say no more than a few years, unless it turns out to be longer…

Follow The Physics of Finance on Twitter: @Mark_Buchanan

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