Low-cost, flexible and intelligent optical performance monitoring and management is a key enabling technology for network quality guarantee, especially in the era of explosive growth of communication capacity and network scale. However, to the best of our knowledge, it is extremely challenging to implement real-time performance monitoring and operations, administration and maintenance (OAM) in a highly complex dynamic network. In this paper, we propose an innovative optical identification (OID) scheme that can realize both performance monitoring and some advanced OAM sub-functions. The basic concepts, applications, challenges and evolution directions of this OID tool are also discussed.