Cybersecurity revolves around how well transmitted information is encrypted, according to Quantum eMotion Corp (TSX-V:QNC, OTCQB:QNCCF), a Montreal-based developer of quantum-safe encryption.
The company has been developing a new generation of quantum random number generators (QRNG), which produce sequences of random numbers that make encryption extremely difficult to be cracked, even when quantum computers come into general use.
Quantum eMotion CEO Dr Francis Bellido has roots in business and science, with an MSc in pharmaceutical sciences, an MBA and a PhD in sciences from the University of Geneva, Switzerland. He came to Quantum eMotion with 35 years of experience in hi-tech, healthcare and the financial industry, and was appointed as Quantum’s CEO in January 2021.
READ: Quantum eMotion completes design of its first Blockchain application of its QRNG technology, eyes 2023 prototype release
Bellido said encryption goes back centuries, giving the example of Julius Caesar using secret code to transmit orders and conversations.
“Using Caesar’s code, when every three letters were shifted to the left, he invented a very simple way to encrypt a message,” Bellido said.
Today, more sophisticated methods are needed for transmitting information over the internet, he added, because the first thing a cyber hacker looks for is a pattern in the code, which makes it predictable.
From that pattern, a hacker can decrypt messages, steal cryptocurrencies, and hobble healthcare systems, among other nefarious actions. That list also includes crippling cell phone systems, the Internet of Things (IoT) and computer networking equipment, according to Bellido.
In a classical sense, nothing is random in essence in the world of Newtonian physics, he said. Currently, computers use random numbers generated by specialized algorithms to protect information. But those algorithms, while very complex, still use patterns by definition and therefore, are predictable, Bellido noted, putting secure information at risk. The only way to produce true randomness is to rely on quantum physics properties.
Working with Professor Bertrand Reulet of the physics department at Sherbrooke University in Montreal, Quantum eMotion is developing a physical device that uses quantum physics to create secure communication in mobile devices, data centres and medical implants, to name a few key markets, by using truly random numbers.
True randomness
QRNG have existed since the second half of the 20th century. However, bulky machines were required, and the use of radioactive materials was hazardous to the health.
Today, the majority of QRNGs use photonics – light waves – but have issues with the size and cost of the operating systems.
Quantum eMotion’s underlying technology is based on the electron tunnelling effect. Here, electrons pass through a barrier they normally wouldn’t be able to, according to classical mechanics, such as a thin insulating barrier between two superconductors.
Quantum eMotion’s technology extracts true randomness by applying a voltage through a tunnel junction to generate a random raw signal across a quantum-tunnelling barrier. The signal is further amplified and converted in a random bit sample, according to the company.
“Pure randomness can only be generated by exploiting the properties of quantum mechanics,” Bellido said.
The deliverables
Quantum eMotion has developed a physical device a little larger than a credit card that functions as a quantum random number generator.
The game-changing QRNG2, a portable device that delivers randomness at 1.5 gigabytes per second, is aimed at letting internet users transmit encrypted information with high security from any device to any number of services, according to Bellido.
The company is also working on a secure messenger platform for use in healthcare, he added.
“Healthcare data, especially data transmitted in real time, is extremely complex, and it needs to be kept confidential,” Bellido said.
Further down the pipeline, Quantum eMotion is looking at developing an ultraportable QRNG, and a PCIe express unit aimed at quantum virtual private network (VPN) usage.
These would use a QRNG-embedded complementary metal oxide semiconductor – also known as a CMOS chip – which would be especially low cost to produce, allowing for high-volume production, according to Quantum. This product will allow the company to target mobile, 5G and IOT applications.
'When you're hacked, you lose everything'
Since the invention and launch of blockchain, hackers stealing thousands in cryptocurrencies, non-fungible tokens (NFTs) and other data-driven assets have made the news.
In fact, cybersecurity attacks have increased four times during COVID, and according to security company McAfee, cybercrime has cost the global economy US$1 trillion in 2020.
Blockchain is defined as a system in which a record of transactions made in Bitcoin or another cryptocurrency is maintained across computers linked in a peer-to-peer network on the internet.
“Ultimately, a person who owns Bitcoin or another cryptocurrency wants to keep it safe. But if they keep it in a ‘hot wallet’, such as a computer or a crypto exchange, they are vulnerable to being hacked. Many people keep their cryptocurrency on a thumb drive, but the minute you attach it to a computer, it’s vulnerable,” Bellido said. “When you’re hacked, you lose everything. There is no way to recoup that cryptocurrency.”
A much more secure option is cold wallets, also originally known as cold storage. Here the digital data is stored on a platform not connected to the internet, thereby protecting the wallet from unauthorized access. However, here also, cold wallets have shown vulnerability to hacking because of poor encryption quality.
The ultimate solution may be a cold wallet secured by QRNG, such as the QRNG2 wallet and the USB key being developed by Quantum eMotion. The idea is to integrate a QRNG in a cold wallet to create the ultimate solution for protecting cryptocurrencies.
Bellido said sales of the portable QRNG2 wallet should start in the second half of 2023, but noted that supply chain issues, and the continuing COVID pandemic, could play a part in delaying the launch.
An almost $250B market
The global cybersecurity market is predicted to grow from US$167.1 billion in 2019 to $248.26 billion by 2023, attaining a 10.4% compound annual growth rate, according to Bellido.
At the moment, Quantum eMotion has four patents awarded in the US and other jurisdictions, C$5 million cash in hand, and funding until December 2023.
The company forecasts a US$100 million market for its portable QRNG2, and more than US$10 billion for the ultraportable QRNG2 model.
Looking ahead to the first sale
Quantum eMotion’s engineers not only work with professor Reulet at L'Université de Sherbrooke, but they collaborate with one of the engineering schools in Montreal – L'École de Technologie Supérieure (ETS) – that specializes in blockchain.
“We’re also working with some of the professors there on the miniaturization of our technology, because that’s our focus. Eventually we hope to have the tech down to a little microchip that fits on the tip of your finger,” Bellido said.
Bellido said working with institutes of higher learning helps because the company doesn’t have access to the money and staff that potential competitors have south of the border.
“So we have to be more creative,” he noted, adding the company is looking to increase the size of its engineering team.
Describing himself as a scientist with a financial background, Bellido said: “My motto has always been ‘from innovation to cash flow’, as that’s what I like to focus on. Transform innovation into useful applications and generate some cash flow along the way.
“Hopefully next year, I’ll have my first sale. When that happens, I’ll open a big bottle of champagne, that’s for sure."
Contact the author at susie@proactiveinvestors.com