True. I don't think this process encourages anybody to commit physical crime. But physical crime has higher barrier to entry than cyber crime and turning what currently is a cyber crime to a physical crime would stop many criminals from committing the crime. Most hackers who are sitting far away from victims won't risk stealing someone's laptop and phone to break into their accounts. Either way that is just a side benefit if any. The real benefit is more secure, yet easier authentication than long, hard-to-remember, and less safe password authentication.
