Two-step verification (also known as two-factor authentication or 2FA) provides a second layer of security to your email address. In addition to requiring something you know (your password), it also requires something you have (generally, your phone or a hardware token). Requiring a second element, often called a token, helps protect you from a number of common methods of gaining your password, like keystroke logger on public terminals, gaining access to your network connection, or even just looking over your shoulder when you type your password in. Unless the attacker also has access to your (constantly changing) second token, your password alone cannot be used to log in to your Pobox account and change your settings.
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