CoT'S HAVE BEEN REMOVED WITH RELEASE 139
Identifying Gear requires a set amount of Crystals of Truth. Crystals of Truth (CoT's) can be dropped by any monster, in increasing amounts based on the level of the dungeon.
When Identified, Items will show Enchantments and Gem Slots. An Improved Item will have 1 enchantment, Magic item will have 2 enchantments, Extraordinary will have 3 enchantments (and min. 1 slot) and Legendary will have 4 enchantments (and min. 2 slots). Gem slots vary. An item with 4 slots (especially Weapon or Weapon Decoration) is very rare.
After Release 139, items can be identified without any tools. So it is completly free.
Most players are going to specific locations to "loot" CoT's. This locations can be:
Mostly skeletons and the Nefertari Cultists have a high drop rate of CoT's (andermant, gems, items...).