The Physics of Trust - Why Quantum Cryptography Is Being Built Before Quantum Computers Arrive

Why Quantum Cryptography Is Being Built Before Quantum Computers Arrive

When people talk about quantum computing, the conversation usually drifts toward the obvious: who’s going to crack the code first, which hardware stack wins (superconducting, trapped ions, neutral atoms), and when we’ll see “quantum advantage” in action. It’s a high-profile race, with heavyweights like Google, IBM, and Alibaba pouring billions into R&D. Understandably, that’s where attention and capital have gone.

But there’s another side to the quantum race and arguably, it’s more investable in the near term. It’s not about building the quantum computer; it’s about protecting everything that the quantum computer will eventually break.

That brings us to quantum cryptography and in particular, Quantum Key Distribution (QKD).

This is where infrastructure is being built with extreme urgency. Alongside venture capital, strategic capital - often sovereign or defense-aligned - is also beginning to flow into this space.

The opportunity here is asymmetric, which is why we’re paying attention. Let’s dive in.

The Urgency

Most of today’s digital security - from your bank login to military communications - depends on one simple idea: that certain math problems are hard to solve. RSA encryption, for example, works because factoring very large numbers is practically impossible for classical computers.

Quantum computers, once sufficiently powerful, will render that assumption invalid. Shor’s algorithm, published back in 1994, shows exactly how. We haven’t yet reached the hardware threshold but when we do, the cryptographic foundation of the digital world becomes vulnerable.

Don’t mistake this for a future problem. It’s a now problem.

Intelligence agencies are already operating under a “harvest now, decrypt later” model - recording encrypted data today with the expectation it can be cracked in a decade or less. Any sensitive information with long-term value - including state secrets, financial records, and healthcare data - is now exposed to delayed compromise.

This is a structural risk - like asbestos in a building. We built the entire system on it and only recently realized the exposure.

What QKD Solves

Quantum Key Distribution (QKD) is not about encrypting data using new or stronger algorithms. It’s about fundamentally changing how encryption keys are shared - replacing computational assumptions with physical ones.

QKD uses particles of light (photons) to transmit encryption keys. Thanks to the laws of quantum mechanics, any attempt to intercept or observe those particles alters their state. If someone tries to eavesdrop while the key is in transit, both sender and receiver will know.

It doesn’t make attacks less likely, but it makes them detectable.

This is different from other forms of quantum cryptography, which still rely on mathematical complexity. 

QKD leverages fundamental quantum principles - most commonly superposition, and in some protocols, entanglement - to enable secure key exchange.

• Superposition allows quantum bits to exist in multiple states simultaneously, enhancing randomness and making key generation more secure and unpredictable.
• Entanglement links particles such that a change in one instantly affects the other, regardless of distance - enabling tamper-evident, distributed communication channels.

Infrastructure Is Already Being Deployed

While most commercial capital has focused on quantum computing and abstraction layers, state-backed capital is flowing into quantum communication infrastructure - and in some regions, it’s already operational.

• China has built a national QKD backbone - over 2,000 kilometers of fiber connecting key cities like Beijing and Shanghai - and launched the Micius satellite for space-based quantum key distribution.
• The European Union is developing its own QKD infrastructure (EuroQCI), funding startups and academic labs across the bloc.
• India has directly invested in domestic QKD startup QNu Labs through its National Quantum Mission.
• South Korea’s SK Telecom has embedded QKD into segments of its 5G backbone.
• Swiss banks have used QKD for interbank communication since 2007.

Infrastructure and capital are being deployed by serious buyers who understand what’s at stake.

Why Space Is the Next Frontier

Terrestrial QKD networks typically rely on fiber, but their range is limited (~100–200 km). To extend coverage, “trusted nodes” are needed but these reintroduce vulnerabilities.

Satellite-based QKD removes that bottleneck. It enables:

• Global reach - secure key distribution across continents and oceans
• Cable independence - no reliance on undersea fiber prone to interception or sabotage
• Sovereign control - governments can own their cryptographic infrastructure
• Compatibility - fits naturally into 5G, 6G, and secure IoT/edge networks

Startups like SpeQtral (Singapore) and national programs like ISRO are already deploying CubeSat-based QKD. These systems are now entering commercial feasibility.

The strategic value goes beyond resilience:

• Encryption redundancy for global telecom infrastructure
• Government ownership of secure communication layers in orbit
• Support for decentralized, mobile-first data architectures in both defense and enterprise contexts

The BYT Capital Perspective

There’s a perception that QKD is too niche, too expensive, or too early.

That’s true - in the same way fiber optics were once too expensive to replace copper. Until they weren’t.

At BYT Capital, our thesis is simple: security assumptions will reset. The infrastructure for that reset is already being built. We intend to back the builders - today.

We are currently evaluating opportunities in:

• Quantum repeater hardware
• Integrated photonic QKD systems
• Satellite-ground QKD interfaces
• Enterprise-grade key orchestration software

We’re especially interested in teams with strong traction in government, defense, and telecom markets.

If you’re building in this space, Submit your pitch here - we’re actively reviewing opportunities.