Identification chips, or ID chips, are basic components that contain a person's identity. Along with providing a person's identification, ID chips are also able to track a person's whereabouts if inputted into a database. ID chips are embedded in a person's left wrist and can be scanned to confirm one's identity.
When Cinder was visiting Peony in the quarantines, she witnesses an android slit the wrist of a dead Letumosis patient, then remove the ID chip and store it in a compartment with dozens of other bloodied chips.
Cinder then sees Peony die and an android comes to take her dead sister's chip. Cinder knocks out the android with a syringe and slits Peony's wrist to retrieve her ID chip.
ID chips are relatively inexpensive to manufacture and can be used to store univs and other forms of money.