Decoherence and loss will limit the practicality of quantum cryptography and computing unless successful error correction techniques are developed. To this end, we have discovered a new scheme for perfectly detecting and rejecting the error caused by loss (amplitude damping to a reservoir at $T=0\mathrm{}$), based on using a dual-rail representation of a quantum bit. This is possible because (1) balanced loss does not perform a “which-path” measurement in an interferometer, and (2) balanced quantum nondemolition measurement of the “total” photon number can be used to detect loss-induced quantum jumps without disturbing the quantum bit's coherence.

• Received 18 September 1995

DOI:https://doi.org/10.1103/PhysRevLett.76.4281