The idea has been in the public domain for 20 years, but MagiQ has amassed a wealth of intellectual property in adapting it to commercial use. "We think the very near-term market is in the hundreds of millions of dollars globally," says Robert Gelfond, founder and CEO of the company.

Here's how it works: the sender uses two random-number generators: one to come up with a bit of information—say, "0"—and the other to choose in which of two ways to polarize the bit on a photon. Next, he sends the bit to the receiver, who guesses the polarization state publicly. The sender then announces, again publicly, whether the guess was right.

After piling up a sufficiently long string of bits this way, both the sender and the receiver will be in possession of the same key, the basis for a "symmetric" coding system (unlike public-key encryption, which uses two keys). Even a symmetric key can be cracked, in principle, but if you want absolute security, you just generate a key as long as your message and never use it again. Such codes, called one-time pads, are theoretically unbreakable.

Why go to market only now, two decades after the method was conceived? "Now we have true single-photon sources and better single-photon detectors," says Gelfond. "There's also been a tremendous decrease in the cost of many optical components—lasers that cost $15 000 three or four years ago now go for $500. To build this device four or five years ago would have cost a million; we're selling systems for $60 000."

Nanotechnology: Nantero Inc.

Woburn, Mass.

The new science of nanotechnology offers a tantalizing promise: the ability to build circuit elements from individual molecules. Only thus can the ever-threatened, never-yet-reached demise of Moore's Law be deferred. Yet despite the ingenuity of the many schemes advanced, the proponents of molecular electronics could never see their way to a mass-producible product, until now. Nantero and its partner, LSI Logic Corp., Milpitas, Calif., recently announced that they have incorporated their technology—which relies on carbon nanotubes related to the famous buckminsterfullerene molecule—into a production line. Result: nanomemory chips that in principle should combine the best qualities of flash memory, DRAM, and SRAM technologies.

Bryan Christie

Totally Tubular:: Carbon nanotube ribbons link interconnects across electrodes. Flexing tubes touch the electrode to complete a circuit.

"We are using a hybrid approach, taking an existing silicon technology and adding a couple of steps to get the nanotubes in place," says Greg Schmergel, cofounder and CEO of Nantero. "We will never ask somebody to build a fab around us. We will instead make it in existing fabs, as LSI is doing." LSI is doing the work in a state-of-the-art CMOS fab in Gresham, Ore.