Fully Homomorphic Encryption Without Bootstrapping [pdf]
eprint.iacr.org
eprint.iacr.org
The BGV paper is the real deal.
Evaluating the claim thus requires skepticism and care. The quality of the paper is suspect as are its proofs. But, as is the case with science, heuristics like this count for little.
They do seem to have selected a hard worst-case problem to base the system on. Obviously this means very little if secure keys and setting in this complexity space can not be found in practice - or if the details of the cryptosystem, for one of many many reasons, lead to its easy compromise.
Looking forward to a proper peer review of the scheme.
Edit: Looks like it's already broken!
The take away is that this would still be nowhere near as efficient as 'traditional', especially symmetric, encryption. What would be a breakthrough is that presumably the scheme would be orders of magnitude more efficient than current existing theoretical FHE schemes.