Weak coherent states as a photon source for quantum cryptography have limit in secure data rate and transmission distance because of the presence of multi-photon events and loss in transmission line. Two-photon events in a coherent state can be taken out by a two-photon interference scheme. We investigate the security issue of utilizing this modified coherent state in quantum cryptography. A 4 dB improvement in secure data rate or a nearly two-fold increase in transmission distance over the coherent state are found. With a recently proposed and improved encoding strategy, further improvement is possible.
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