[krupan]

How is any of that worse than passwords? I only see improvements. Still not perfect, but big improvements.

[taeric]

My question is how is it any better? A weak link is the trust chain, in both.

For problems, easy ones to consider is that of access. Easy to forget to take a key with you. Or lose it in a fire/disaster.

You can also be compelled to turn over a hardware token. Or a digital file.