This is just a general question regarding the debate between self-signed certificates and CA certificates...
I understand the benefits for a CA certificate due to the avoided warnings generated in most browsers, but how does a CA certificate benefit actual security? I commonly hear the biggest threat is man-in-the-middle attacks, and while I understand this threat using a self-signed certificate, I don't understand how a CA certificate prevents this. I know CAs perform their own security algorithms couldn't the same algorithms be used on self-signed certificates?
I guess I'm just a little irritated by the big business revolving around the need for CA certificates but can't seem to find anything different about them other then these supposed additional security checks they perform. Is there anything a CA can provide from a security point-of-view that self-signed certificates cannot?
Spoofing. If the other party fakes a self-signed certificate, you have no way to check this. In order to check that you have received the valid certificate and not a forged one, you need third-party check which can not be easily spoofed. This is done by carrying the list of root CA certificates (and some intermediate certificates) with your client-side software (Windows includes such certificates for you and major browsers do the same) and verifying the certificate you receive from the server using those CA certificates. With self-signed certificates such verification is not possible.
Of course, you can carry the self-signed certificate with your client application (and this is what some developers do, especially for in-house applications) but this doesn't work with browsers.