  Conventionally, secrecy is achieved using cryptographic techniques beyond the
physical layer. Recent studies raise the interest of performing encryption
within the physical layer by exploiting some unique features of the physical
wireless channel. Following this spirit, we present a novel physical layer
encryption (PLE) scheme that randomizes the radio signal using a secret key
extracted from the wireless channel under the assumption of channel
reciprocity. Specifically, we propose to jointly design the encryption function
and the secret-key generation method. On one hand, we establish a sufficient
and necessary condition for the encryption function to achieve perfect secrecy.
Based on that, several candidate encryption functions are proposed and
compared. We show that, given the secret key available to the legitimate users,
perfect secrecy can be achieved without compromising the capability of the
communication channel. On the other hand, we study the practical design of the
secret-key generation method based on the channel reciprocity. We show that, by
introducing marginal system overhead, the key agreement between the legitimate
users can be done with a high success probability. The performance advantages
of the proposed PLE method is verified through comparisons against other
existing PLE methods.
