It's a decentralized identity system. It couples an identity server to an URL, so that you can use the URL as your identity, and the server (which can be changed around as you like) authorizes you with the board you post on.

Essentially, I could set up http://wakaba.c3.cx/ to be my identity, and add a few tags to it to use my Livejournal account as an identity server, and when I post somewhere that supports OpenID, I give my URL, and the script authorizes against Livejournal's servers to figure out that I really am the person who controls http://wakaba.c3.cx/.

I haven't looked too closely over the details of how this works under the hood, yet.

It servers pretty much the exact same purpose as tripcodes, except for being more secure, more cumbersome, and more descriptive (an URL is easier to understand than a DES hash).