It's been dubbed "the space race of the computer era", and Australia is on its way to playing a big role.

Microsoft recently announced it will build a quantum computer – a billion-dollar project, according to one source – and some of that spend is coming to Sydney.

The computing giant has hired Professor David Reilly, of the University of Sydney, to build its new systems, along with another four of the best quantum minds in the world.

Microsoft won't confirm its budget other than to say the company has "more than doubled its investment in its quantum efforts".

The power of quantum computing promises to launch a new industrial revolution. "Quantum science is at the stage where we are moving from isolated systems to actual machines," Reilly says.

The promise is great. Quantum computers could help unlock pathways of chemical reactions enabling the production of new drugs, new materials and new chemicals for health, agriculture and materials science.

Quantum machines could become the centre of artificial intelligence networks, blow open existing security systems, and lead to totally secure online shopping.

And by being able to consider so many pathways simultaneously, quantum computers will allow vastly improved modelling in fields such as climate science and economics.

Reilly leads the Sydney group of Station Q, one of eight sites that Microsoft has established in pursuit of a workable quantum computer. His team focuses on the interface between quantum and classical technology.

"David brings to the project an appreciation of the relationship between existing advanced electronics and future electronics," says Professor Charles Marcus from the Niels Bohr Institute in Copenhagen. Marcus is another of Microsoft's big hires for the project.

Reilly, who will stay in Sydney to work on the project, said Sydney Uni's $150 million investment to build the Sydney Nanoscience Hub has meant it is possible to do the sort of quantum research needed in Australia. The federal government provided $40 million for the building, opened in March 2016.

"Things are getting exciting," Reilly says. "We are at the stage of building here in Australia. We are ramping up and hiring." He says his team based at Sydney Uni is expecting to hire 20 quantum engineers in the next six months.

The Sydney basin is emerging as a world centre in quantum technology. Alongside the Nanoscience Hub, Sydney University is also part of the Centre for Engineered Quantum Systems, UNSW has its impressive quantum computing team and the University of Technology Sydney recently launched its Centre for Quantum Software and Information. Macquarie University also has a research centre for quantum science. 

Microsoft's move means it has now joined Google and IBM in what UNSW quantum physicist Michelle Simmons has called the "space race of the computing era".

Her team is attempting to build a silicon-based quantum computer. It, too, has gained the favour of the Turnbull government, attracting $26 million in federal funding last year.

There are three main technological approaches to building a quantum computer: trapped ions, superconductors and semiconductors. No one is sure which will work first, or best. Microsoft is betting on a fourth approach, and it's the strangest yet – the braiding or topological knotting of quasiparticles called majorana fermions. But more of that later.

To develop its quantum architecture, Microsoft has appointed its project guru Todd Holmdahl, who brought the Xbox to the world. "This signals they are serious about moving from science and engineering to developing a product," Professor Reilly says.

What is a quantum computer?

Quantum computers will use the very strange properties of matter at the atomic and subatomic scale to power new machines capable of computations way beyond the scope of even the fastest classical supercomputers.

But they are very tricky to build.

Professor Chris Monroe from the University of Maryland is one of the world's leading experimental quantum physicists. He told Fairfax Media: "Going from a PC to a quantum computer is much more radical than going from an abacus to a PC."

What an abacus and a PC have in common is they are used to perform one calculation after the other. Using billions of transistors on a chip, modern computers can perform these linear calculations with astonishing speed but they share an essential similarity with the abacus.

A quantum computer will be a different beast. Quantum bits – or qubits – aren't limited to being on or off like digital bits. Utilising the quantum principle of superposition, qubits can exist in more than one state simultaneously. Building an entangled network of such qubits will allow multiple calculations to be performed simultaneously.

This will produce a completely different form of computing power, and such power will create a whole new technology that we can barely imagine.

The real trick will be in getting something useful at the end of the computation, which is a problem for quantum software and the development of suitable algorithms.

Jerry Chow, head of IBM's quantum computing program in New York, tells Fairfax Media: "There are many breakthroughs to come in science that will define what quantum systems look like. With quantum computing, we are at the 1940s level for regular computing."

"Think about how much additional science was necessary to get from the 1940s to the point where we are today with smartphones and laptops," he says.

Professor Michael Biercuk at the University of Sydney agrees. "Quantum computers today are as large as early mainframes. It's quite sensible to start out with a concept of expert maintenance of centralised hardware coupled to user access over the cloud."

IBM is taking such an approach. Last week it launched a new application interface for its cloud quantum computing service that utilises its five-qubit superconducting system.

"Through the IBM Quantum Experience we have developed a community of quantum computing users. More than 40,000 users have signed up," says Chow.

Although very cool, these are little beyond the realm of demonstrations of possibility than a full-blown computational infrastructure.

How long will it take to build a quantum computer?

A workable quantum computer has been "about 10 years away" for the past two decades. But many think this year (or the next) could see breakthroughs towards "quantum supremacy" – where quantum machines move beyond the realm of demonstration and overtake the fastest supercomputers for trivial problem solving.

Last week, The Economist went so far to say that quantum computing's "challenges are no longer scientific but have become matters of engineering".

Fairfax Media spoke to more than a dozen leading quantum scientists worldwide about this and while many think the time scale for a workable computer has come down considerably, all said there was still a lot of science to be done.

Professor Raymond Laflamme from Canada's Perimeter Institute and Waterloo University's Institute for Quantum Computing says: "We are entering the era of quantum engineering but we still need the input from quantum science."

Speaking last year, Microsoft's Holmdahl said: "I think we're at an inflection point in which we are ready to go from research to engineering."

Stephanie Wehner from TU Delft in the Netherlands says: "I wish it was just an engineering problem. Evidently, engineering is extremely important, but there are many fundamental theoretical questions unknown."

James Clarke, Intel's director of quantum hardware, says: "The next step is to use engineering to standardise quantum devices, to make thousands of them exactly the same. This will allow a more systematic scientific study of quantum physics."

Google is also in on the chase, teaming with the John Martinis group at the University of California in Santa Barbara. Professor Martinis told Fairfax Media: "We certainly are spending a lot of engineering effort with our project, but to say there is still no scientific work needed is incorrect."

Although most scientists disagreed with The Economist's premise that quantum computing is now only an engineering problem, all agreed with the shared optimism in the field. "We are entering the age of actually building quantum devices that are more than just tricks and demonstrations," Monroe says. "I think right now is by far the most exciting time I have seen in the field."

The search for the perfect qubit

A digital bit on a classical transistor is a switch. It can be either on or off, a zero or one, up or down. Qubits are able to exist in a superposition of both potential states. There are varied materials that can be manipulated to produce qubits.

Superconducting qubits allow for a current of electrons to flow in more than one direction in superposition. In solid-state semiconductors, such as phosphorus in silicon, the superposition occurs by utilising the "quantum spin" state of the qubit. In trapped-ion qubits, the quantum states of isolated individual ions are manipulated using lasers and electromagnetic fields.

Microsoft is betting on something even stranger. Qubits are very susceptible to interference from radio waves and electromagnetic fields in the world around them. This causes their quantum states to "decohere".

But you can't completely isolate them because you need to control them and get an answer from your quantum computer at some stage.

The approach adopted by Microsoft is driven by Marcus in Copenhagen and his close collaborator Professor Leo Kouwenhoven from TU Delft in the Netherlands. They have opted to create qubits by tying knots in particles first hypothesised in 1937. Evidence demonstrating they might exist has only recently emerged.

Majorana fermions, as they are known, do not exist naturally; they must be induced at the ends of superconducting nanowires by being coupled with a semiconductor.

The quantum information in these qubits is then manipulated by braiding or knotting them in two dimensions. Because these computing operations are dependent on structure, or topology, rather than charge or quantum spin, it is predicted these qubits will be very resilient to decoherence.

That's the theory. The problem is that the new Microsoft team around Marcus and Kouwenhoven are yet to build such a qubit.

Professor Andrew Dzurak is part of the UNSW quantum team. He told Fairfax Media: "Topological quantum computing has the advantage over other approaches in that there is a level of inbuilt protection from errors.

"However, no one – including the Microsoft team – has as yet demonstrated a quantum logic operation using majorana fermions. Indeed, it is only a couple of years ago that Leo Kouwenhoven's team at Delft showed evidence of their existence, so they've got quite a long road ahead."

Of Microsoft's project,Dzurak says: "It's great to see Australia represented through David Reilly. David is recognised as one of the world leaders in the development of systems engineering support for future quantum computers."

So why is Microsoft throwing so much at a project that hasn't even produced a single quantum bit?

Marcus told Fairfax Media: "I don't know if I have to be a 'company man', but as a scientist, pursuing this path to quantum computing feels right. How much do I know? How certain am I that we will succeed? We don't know yet. But we know enough for me to commit my life to the project."