We describe in detail our recent demonstration of a 10 Tbit/s secure physical layer transmission that we achieved by using digital coherent QAM quantum noise stream cipher (QNSC) and injection-locked WDM techniques. We used an FPGA-based transmitter and receiver to demonstrate a 165 channel polarization-multiplexed WDM 5 Gbaud 128 QAM/QNSC (70 Gbit/s) on-line transmission over 160 km with a spectral efficiency of 6 bit/s/Hz. In the present system, the original 128 QAM data were encrypted in a 1024 × 1024 QAM format using basis information. The encrypted signal was then masked by a large ASE noise, which reduced the detection 'success' probability for an eavesdropper to 0.13% for each symbol. Furthermore, the multiplicity of the original QAM data and the seed keys used to generate the basis information were arbitrarily changed with time, which makes the decryption much more difficult.
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