Coin flipping is a technique for establishing a cryptographic channel between two mistrustful parties. It was popularized by quantum cryptography, which uses quantum physics principles to create an encryption key. Coin flipping was designed to prevent the communicating parties (say Alice and Bob) from cheating while encrypting or transmitting data.
To begin the coin flipping protocol, Alice uses a beam splitter to polarize photons, per quantum physics principles. The beam splitter divides the photons either linearly or diagonally. The generated quantum bits, or qubits, she then sends to Bob. Bob also uses a beam splitter to polarize the photons and records the resulting bit measurements, often measured as either 0 or 1 like traditional bits. He sends those to Alice to compare results.
Alice will then confirm that she has the same results, if she indeed does. (Note that the security of this depends on Alice not changing her answer for the second step. Some security protocols might require that Alice be bound to her initial polarization results and cannot change them later.) Alice and Bob will then use the bit (or multiple bits) that had the same polarization to create the shared, secret encryption key. Ideally, they should each show each other the list, table, or chart of qubit sequences to see that neither cheated.
If Alice rejects the bit or sequence of bits that Bob returns to her, the coin flipping protocol will fail and no encryption key will be generated. If one of the lists is wrong, that will reveal an error or deception on one side. If Alice sends a different report of qubits to Bob than her initial one, this is a form of cheating. Though cryptography researchers state that there are methods of securing the coin flip protocol, its security relies on controlling many different aspects of the protocol that could be manipulated. However, coin flipping is an important method in the growing field of quantum cryptography because it allows two parties who do not trust each other to share encrypted data.