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A fiber-optics-based sensing network applicable for fault detection in power system is presented. The proposed scheme is secure and immune from interferences. At each monitoring location, passive rugged fiber-Bragg-grating-based sensors are deployed. They use fast and compact magnetostrictive transducers instead of current or potential transformers to translate current-induced magnetic field into optical signal. These sensors can be compensated for temperature drift and easily be integrated into an optical sensing network. A broadband light source at a substation scans the change in reflected optical power at a unique frequency band that corresponds to the surge in magnetic field associated with an increased fault current at a certain location. A unique feature of this real-time scheme is that it only requires current information for fault detections in both radial and networked systems with various pole structures and line configurations. It can easily coordinate with other protective devices and is free from any time-current coordination curves. The proposed scheme has been extensively tested by simulations. They confirm that the proposed scheme is able to detect the faults irrespective of the type and location. It also performs well in presence of harmonics, high impedance, and sensors malfunctions, as well as sensor noise.