The Soul and the False Ego

The false ego is the subtle material machine that identifies the soul with the material body,
which it receives as a disguise in the various plays it performs life after life.

The ego, that is the soul, identifying itself with the characters it plays through the False Ego.

This identification with the material body is achieved
thanks to the activity of this material machine - the False Ego, with which the soul is equipped,
the activity which the soul believes it is performing:
That is why the False-Ego is called Aham-kara - I do.

False ego, the first element of (material) creation
is a subtle machine like an energy field
and is the first covering that covers the soul with illusion.

This machine has only one function
to give the soul another identity, another ego.

To be able to exist in a world that is completely inadequate for the soul, the material world,
incompatible with its spiritual nature (eternity, love and absolute knowledge),
the soul is put into a machine,
which makes it believe that it is in its own element.

With the help of this machine the soul identifies itself
with the gross and subtle body it receives,
as well as with its other products,
direct or indirect products, such as children or family in general.

The more the soul is immersed in the whirlpool of the material world, the more
it will identify with the house it is in, with the car that carries it to work,
with the city, the country, with the various associations to which it is attached...

On a more subtle level the soul can identify itself with either the mind or the intelligence,
becoming very attached to and proud of the ideas acquired:
Cogito ergo sum - I think therefore I am.

And that only because of the false ego (aham-kar).

The Material Nature of the False Ego

bhūmir āpo 'nalo vāyuḥ / khaḿ mano buddhir eva ca
ahańkāra itīyaḿ me / bhinnā prakṛtir aṣṭadhā

This material energy - prakṛtir of Me has eight divisions as follows.
earth (bhumir) water (apa) fire (anala) air (vayu) ether (kham)
mana (mind) buddhi (intelligence) and of course (like eva) false ego (ahańkāra)

Function of the False Ego

Is to delude the ego - the soul 

Supreme Lord Shri Krishna states in the Bhagavad-gita. 3.27

prakṛteḥ kriyamāṇāni / guṇaiḥ karmāṇi sarvaśaḥ
ahańkāra-vimūḍhātmā / kartāham iti manyate

The soul that is deluded by the False Ego - ahańkāra vimudha atma
is convinced in this way, "I am the doer" (in all that happens)- manyate iti aham karta
(but) all that happens - sarvaśaḥ karmāṇi
is executed by the qualities of material nature - kriyamāṇāni guṇaiḥ prakṛteḥ

So in the state conditioned by the False Ego, everything that one
thinks, feels, desires, takes as decisions, and acts
are phenomena of the elements of the material nature of the subtle body (mind, intelligence) and the gross body.