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Two factor authentication has been gaining popularity with Google, Apple, Dropbox and other services implementing them. Two factor authentication is always better and more secure than the conventional login. Microsoft has also been planning to implement it on their service. Microsoft has now released the Authenticator app for Windows Phone which generates security codes you can use to help keep your Microsoft account secure.
You can add your Microsoft account to the app by scanning a barcode or by manually entering a secret key. The app implements industry-standard security code generation and may also work with other services and providers.
As of now this is not yet implemented on any Microsoft services, but the release of the app now confirms that two factor authentication will be soon rolled out for Microsoft accounts.