# Quantum Physics for Beginners and Quantum Investment Trends

## Quantum physics for beginners

Quantum technologies have been quite trendy lately. However, without a degree in quantum physics, it's quite challenging to figure out what's myth and reality. Quantum physics studies matter and energy at the most fundamental level. It aims to uncover the properties and behaviors of the building blocks of nature, such as photons, electrons, protons, atoms, and molecules. Scientists in the late 1800s and early 1900s started studying quantum physics after a series of experimental observations of atoms didn't make intuitive sense in the context of classical physics.

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These counterintuitive properties make quantum physics a difficult topic to comprehend. Here are some of the central concepts that helped lay the foundations of quantum physics:

**Wave-particle duality**: Light and matter exhibit both wave- and particle-like behavior. A given kind of quantum object will sometimes exhibit wave and sometimes particle character in different physical settings. A particle occupies a defined position in space and does not interfere - i.e., a defined space cannot be occupied by two particles simultaneously. Waves are spread out in space and can interfere**Uncertainty principle**: The exact position and momentum of a particle can never simultaneously be determined due to wave-particle duality**Superposition**: This is a term used to describe an object as a combination of multiple states simultaneously. A superposed object is analogous to a ripple on the surface of a pond that is a combination of two waves overlapping. Since particles have wave-like properties, they can interfere and become superposed

**Entanglement**: This phenomenon occurs when two or more objects are connected in such a way that they can be thought of as a single system, even if they are very far apart. In such a case, learning information about one object of the system will automatically reveal information about the others and vice versa. Under some conditions, it's possible to generate entangled quantum objects

The act of observation of quantum objects has fundamental consequences in quantum physics. Simply speaking, it's believed that observing an experiment “influences'' the outcome. For example, if an electron is in superposition, it remains as long as it's not observed. Once observed, the electron collapses to a specific position. To illustrate this phenomenon, Schrödinger, a famous Austrian physicist, and a quantum research scientist, devised the following experiment:

Suppose someone puts a cat in a sealed box with a single radioactive atom. Radioactive atoms decay, meaning they lose energy by emitting radiation over time. Radioactive decay is a random process at the level of single atoms - it's impossible to predict when a particular atom will decay. When the atom decays in the box, a door opens, giving access to poisoned food to the cat. When the food becomes available, the cat will eat it. The question is: what happens when someone opens the box? Is the cat dead or alive?

There are two possible outcomes: Either the cat will be found dead, meaning that the radioactive atom has decayed, or the cat will be found alive and the atom has not yet decayed. Since there's an equal probability that the atom has decayed or not, the atom must be in a superposition of decayed and non-decayed states simultaneously inside the box. One can only know if the cat is dead or alive (resulting from the atom's decay) if the box has been opened, which is equivalent to making an observation. Somehow, the cat is both living and dead inside the box until an observation is made.

It's the quantum properties highlighted above that quantum research scientists strive to leverage to come up with groundbreaking technologies and innovations. Most of today’s quantum innovations fall under three broad categories:

- Quantum computing
- Quantum communication
- And, quantum sensing or metrology

## Quantum computing

Traditional computers work with bits. A **bit** is the most basic unit of information in computing and digital communication. It can take the values “0” or “1”. Bits are stored in memory using capacitors that hold electrical charges. The charge determines the state of each bit, which in turn determines the bit’s value, i.e., “0” or “1”.

Quantum computers rely on the laws of quantum mechanics. Unlike in traditional computers, the information in quantum computation is recorded in terms of the two electronic states of an atom. Each bit of information carried by quantum computers is called a “quantum bit," or qubit. The particularity of qubits is that they can represent “0” and “1” at the same time, thanks to the property of superposition. This is where the powerfulness of quantum computers lies.

Note that quantum computers are not “super fast” traditional computers. Quantum computers can handle specific problems or algorithms better than conventional computers.

The superposition property of the qubits allows quantum computers to probe many possibilities at the same time. For example, four possible outcomes can be calculated simultaneously with only two qubits: {00,01,10,11}. The number of calculated outcomes grows exponentially with the number of qubits: The general formula is 2**^**n outcomes for n qubits. In contrast, traditional computers simultaneously calculate n outcomes with n qubits.

Hence, quantum computers will offer computational capabilities that will surpass existing supercomputers and excel at solving problems that require enormous computational power. Some of the applications that will highly benefit from such computational power are simulations and optimizations.

Today, tech giants, universities, and startups worldwide are working towards building a commercially-viable quantum computer that is powerful enough to be worth using. In late 2022, IBM, one of the leading companies in quantum technology, announced breakthrough advancements in quantum hardware and software with a 433 qubits processor. Using comparison, the number of bits in a traditional computer revolves around a billion.

## Quantum communication

Like other communication technologies, quantum communication uses photons, or light particles. Most quantum communication technologies are similar to traditional optical or laser communications. Xairos, a quantum communication startup, explains that while an optical communication link strives to provide high data rates by modulating a laser beam, a quantum communication system strives to provide very secure communications by manipulating each photon of a beam.

A quantum communication system transmits manipulated photons from point A, often called Alice, to point B, often called Bob. In other words, the manipulated photons are transmitted by Alice and received by Bob. This system is incredibly secure since the photons are in superposition while being transmitted. If an eavesdropper, or often referred to as Eve, observes the manipulated photons instead of Bob, the quantum properties of the photons are irreparably changed (i.e., the photons collapse to a fixed position - either “0” or “1”). Hence, a hacker cannot tamper with information transmitted by quantum communication systems without leaving a track behind.

Quantum communication systems are mainly used today to create networks to transmit sensitive data based on the quantum key distribution, or QKD. This method sends encrypted information as classical bits over networks while providing keys for the decryption in a quantum state using qubits.

The best-known approach to implement this is known as BB84 and works as follows. Suppose Alice wants to send encrypted data to Bob. To secure the transmission, she creates a decryption key in qubits. The qubits are then sent to Bob. To ensure that Alice and Bob hold the same decryption key, they each compare measurements of the state of a fraction of these qubits.

Note that the superposition state is extremely fragile, and some qubits will collapse during their travel time; this process is known as “decoherence." If the error rate between Alice’s and Bob’s measurements is above a certain threshold, it indicates that a hacker has tried to intercept the decryption key. If Alice and Bob are confident that they share the same secure key, Alice can encrypt data and send it in classical bits to Bob, who can use the key to decode the information.

There are other approaches to securely transmit information using quantum properties (e.g., entanglement). Also, there are other applications for quantum communication. For example, Xairos leverages the property of entanglement to develop a global timing service.

## Quantum sensing

Degen *et al.* (2017) describes quantum sensing as using quantum systems, quantum properties, or quantum phenomena to measure a physical quantity. Quantum sensors are essentially systems in which quantum particles are in such a delicate balance state that they are affected by tiny variations in the environment they are exposed to, which can be measured. The ultimate quantum sensor is capable of detecting a single particle of light. This technology unlocks the ability to precisely measure variations in magnetic and electrical fields and provide better resolution when images are captured.

Quantum sensing can be applied for various purposes: bioimaging, navigation, environmental monitoring, mining, autonomous driving, etc. One could imagine ultra-sensitive quantum sensors able to detect tiny electrical signals in our brains or compasses so precise that underwater navigation would be drastically improved.

However, since quantum sensors are so sensitive, it’s extremely difficult to shield the quantum objects from subtle variations (i.e., variations that should not be measured). One common solution in laboratories is to trap the quantum objects used for measuring into diamonds to protect them from external influences. The lack of hardware available for sensing parameters outside laboratories poses a real challenge for large-scale quantum sensing applications.

## Quantum investment trends

While there are many hurdles for quantum technologies to overcome to turn into common tools, funding for quantum physics and industrial interest have significantly grown over the last few years. The World Economic Forum estimates that $35.5bn in public and private investments has been committed to quantum technologies by 2022. Many companies and governments are launching strategic quantum initiatives to become prominent players in the quantum race.

China ($15bn), the European Union ($7bn), and the United States ($2bn) have announced the most public funding planned for the development of quantum technologies over the next few years. Within the European Union, national initiatives are also undertaken on top of European joint efforts. For example, France and Germany have dedicated around $2bn to creating countrywide quantum programs.

Most quantum investments remain driven by private investors. In 2022 only, over $2bn was invested in such companies worldwide for 73 newly disclosed private funding rounds. At the global level, most quantum investments occur in US companies, followed by UK companies and Canadian companies. Most investments focus on quantum computing companies producing hardware components. China has a particularly strong focus on quantum communication technologies.

There has been an increasing number of Series A and B funding in 2022, which highlights the continued maturation of the market. Some of the most remarkable 2022 deals were ColdQuanta’s $110mn Series B, Xanadu’s raise of $100mn in Series C financing, and Terra Quantum’s $75mn Series A. As of early 2023, four quantum technology startups (IonQ, Rigetti, D-Wave, and Arqit) went public through special purpose acquisitions by companies (SPACs).

**Outlook of quantum investments and market**

Strong, steady growth is expected for the global quantum market in the coming years, according to Hyperion Research. The quantum computing market was estimated to be worth around $600m in 2022 and is projected to grow at an annual rate of 25.3% to 2025. This would drive the global quantum computing market to be worth $1.2bn in 2025. The market for quantum sensors is projected to reach 565m USD by 2027, growing at a CAGR of 16.8%. Commercial applications of quantum communication technologies are also expanding. Chinese quantum research scientists remarkably set up a QKD network between more than 150 users over a combined distance of 4600 kilometers in 2021.

However, large-scale applications of quantum technologies remain in the developing stage and face complex challenges. A significant challenge for quantum hardware developers is to find a way to create fault-tolerant systems. Maintaining qubits in superposition is extremely delicate, and if qubits collapse (to either “0” or “1” like classical bits), then any quantum advantage will diminish.

Even more problematic, this phenomenon, known as decoherence, introduces errors that lead to incorrect answers. Gill *et al.* (2021) highlight that much of the ongoing research efforts in quantum hardware development are focused on developing so-called quantum error correction, or QEC. In addition, many physical qubits are required to run a quantum algorithm efficiently. Upscaling the number of qubits in a quantum computer is a crucial design challenge.

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Last but not least, with such a fast-growing ecosystem, many quantum companies face issues with talent availability.

There’s no doubt that quantum computers will come, but it’s impossible to predict how quickly the technology will advance. Businesses must understand the implications of quantum technologies on their industry and formulate strategies. According to a EY survey, only 24% of companies in the U.K., one of the most vibrant quantum markets, have taken tangible actions toward getting quantum ready. Adopting a wait-and-see approach is not without risks, as early movers will shape the way quantum technologies will eventually be used. “Start preparing” is the overarching message for business leaders and investors.