The system is capable of distributing encryption codes at megabit-per-second rates, five to 10 times faster than existing methods and on par with current internet speeds when running several systems in parallel.
In a study, published in the journal Science Advances, the researchers demonstrate that the technique is secure from common attacks, even in the face of equipment flaws that could open up leaks.
"We are now likely to have a functioning quantum computer that might be able to start breaking the existing cryptographic codes in the near future," said Daniel Gauthier, from The Ohio State University in the US.
To a hacker, our online purchases, bank transactions and medical records all look like gibberish due to ciphers called encryption keys.
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Personal information sent over the web is first scrambled using one of these keys, and then unscrambled by the receiver using the same key.
For this system to work, both parties must have access to the same key, and it must be kept secret.
Quantum key distribution (QKD) takes advantage of one of the fundamental properties of quantum mechanics - measuring tiny bits of matter like electrons or photons automatically changes their properties - to exchange keys in a way that immediately alerts both parties to the existence of a security breach.
The problem with many of these systems, said Nurul Taimur Islam, from the Duke University in the US, is that they can only transmit keys at relatively low rates - between tens to hundreds of kilobits per second - which are too slow for most practical uses on the internet.
Like many QKD systems, Islam's key transmitter uses a weakened laser to encode information on individual photons of light. However they found a way to pack more information onto each photon, making their technique faster.
This trick, paired with high-speed detectors developed by Clinton Cahall, from Duke University, powers their system to transmit keys five to 10 times faster than other methods.
"It was changing these additional properties of the photon that allowed us to almost double the secure key rate that we were able to obtain if we hadn't done that," said Gauthier.