After a short introduction to classic cryptography we explain thorough
ly how quantum cryptography works. We present then an elegant experime
ntal realization based on a self-balanced interferometer with Faraday
mirrors. This phase-coding setup needs no alignment of the interferome
ter nor polarization control, and therefore considerably facilitates t
he experiment. Moreover it features excellent fringe visibility. Next,
we estimate the practical limits of quantum cryptography. The importa
nce of the detector noise is illustrated and means of reducing it are
presented. With present-day technologies maximum distances of about 70
km with bit rates of 100 Hz are achievable.