To identify first you must right click the identifier NPC. A menu with 8 slots with a checkmark at the end and your inventory should appear. In your inventory, click the equipment you wish to identify to place it in the slots. If you have a sufficient amount of Emeralds (can be Emerald Blocks or Liquid Emeralds as well) in your inventory to identify the item(s), the checkmark should be green. If it is red, you aren't carrying enough emeralds and you may scroll over it to reveal how many you need. When the checkmark is green, you may click it to begin the identification process. The equipment in the identification slots will then quickly cycle through different items until it has been identified, and then you can put the equipment back in your inventory.
Items can also be re-identified for 5 times the original identification cost. The process is the same as above; put the already identified objects in the slots and click on they yellow circle made out of arrows. Your item will be re-identified as a different item.
There is one in Ragni,at the first quest NPC's right.
This one is in one of the deepest buildings of the bay.
Some items used to have special characters in their names, but since the 1.14 Gavel Expansion got released new versions of those items have names without special characters. However the old items broke and cannot be used anymore at all.
All items (except broken ones; see previous point) got unidentified when the new stat system got introduced with the 1.14 Gavel Expansion Update, and since the 1.14.1 Gameplay Update items can be re-identified. But if items with preset stats which are not supposed to be reidentified (e.g. items from merchants like Bobs Mythic items) got unidentified due to the Gavel Expansion, they cannot be identified anymore since the Gameplay Update. This happens because Item Identifiers don't accept those items not matter if they are identified or unidentified.
Most buildings that Item Identifiers are in have loads of potatoes. Potatoes were originally a small easter egg in the game, until it became a tradition to put them in nearly every Identifier building.
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