Bring your ID.
This is called the identificatieplicht, or identification-obligation. Since 2005 it's a nationwide rule that everybody must have some form of ID on them when they're out and about. It can be your Dutch ID card or residence permit, and/or your passport.
The verb for showing your ID is legitimeren they want you to 'legitimize' yourself! If you can't, and the police stop you for whatever reason, there will be some difficulty. You may be taken to a police station until someone else can bring your ID from home.
This may be as good a place as any to mention the thing about preventieve fouillering. For the last few years they have a practice in Amsterdam of occasionally doing spot checks on the population, 'preventively frisking' people in the street. I think they're looking for weapons, and sometimes they may be looking for illegal drugs like XTC or hard stuff. Of course plenty of people resent this and see it as a breach of privacy. If you refuse to cooperate with the search or your person or bags, you can be prosecuted for wederspannigheid, which translates to 'rebelliousness' or 'obstinacy'. This was tested in court back in 2012.
I got frisked just once, a few months ago. I was walking from Rembrandtplein through the Halvemaansteeg to the Amstel, on my way to Mulligan's. Police, with horses, sealed off both ends of that little street, and everyone in there had to line up to be frisked by an officer before being allowed to pass. I think they had three or four friskers on the team. It was all very civilized, and for some reason it didn't bother me a bit. By the time I came back the same way half an hour later, the police were gone again.
But if it's a true spot check, where they single out individuals instead of everybody in the street, I have to tell you that you are more likely to be stopped if you are black or North-African in appearance. I'm not a witness to this myself, but there is a lot of anecdotal evidence for 'profiling'. Sorry.