This technology couples the physical layer characteristics of wireless networks with key generation algorithms. It is based on the wireless communication phenomenon known as the principle of reciprocity which states that in the absence of interference both transmitter and receiver experience the same signal envelope. Signal envelope information can provide to the two transceivers two correlated random sources that provide sufficient amounts of entropy which can be used to extract a cryptographic key. In contrast, it is virtually impossible for a third party, which is not located at one of the transceivers position, to obtain or predict the exact envelope and retrieve the key. This technology provides a key management scheme for virtually all wireless networks.