Security Issues
CAs are third parties and require both parties to trust the CA. (CAs are typically large, impersonal enterprises and a high value target for compromise.) If the parties know each other, trust each other to protect their private keys, and can confirm transfer public keys (e.g. compare the hash out of band), then self-signed certificates may decrease overall risk. Self-signed certificate transactions may also present a far smaller attack surface.
Self-signed certificates cannot (by nature) be revoked, which may allow an attacker who has already gained access to monitor and inject data into a connection to spoof an identity if a private key has been compromised. CAs on the other hand have the ability to revoke a compromised certificate if alerted, which prevents its further use.
Some CA's can verify the identity of the person to whom they issue a certificate; for example the US military issues their Common Access Cards in person, with multiple forms of other ID, and only when a higher authority requires the issue.
Read more about this topic: Self-signed Certificate
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