How does two-factor authentication enhance security?

Two-factor authentication enhances security by requiring two forms of identification from users before granting access to an account or system. This method fundamentally strengthens the protection of sensitive data and systems by combining something the user knows (like a password) with something they have (such as a mobile device or a hardware token).

By implementing this dual-layered approach, even if an attacker manages to obtain the password, they would still be unable to access the account without the second form of identification. This significantly reduces the likelihood of unauthorized access and improves overall security, making it far more difficult for identity theft to occur.

The other options, while they may contribute to security in different ways—like phone verification, time-based access limitations, or data encryption—do not directly describe the mechanism of two-factor authentication. Only the requirement for two forms of identification captures the essence of this security measure, making it the most accurate choice.