3D passwords combine multiple authentication factors by using a 3D virtual environment. Users authenticate by interacting with virtual objects in a specific sequence based on their location. This addresses limitations of traditional passwords that can be cracked or stolen. The 3D password is constructed through a user's interactions in the virtual world, combining what they know, have, and do for strong multi-factor authentication. While providing increased security, 3D passwords also have drawbacks such as increased storage needs and vulnerability to timing attacks if the virtual environment is not carefully designed.