John's Gospel was written "that you may come to believe that Jesus is the Messiah, the Son of God, and that through believing you may have life through his name (John 20:31). The end purpose of this Epistle is to give us the certainty that we have that eternal life (1 John 5:13)
To do that John looks at our assurance from a series of different viewpoints. First he based our certainty on the fellowship of walking in the light, as opposed to moving into the darkness (1:3-2:2). Then there was the certainty of obedience (2:3) which he defined as abiding in an organic relationship to the Lord and our brothers and sisters (2:3-17). The third section contrasted the direction of our looking, either to the Messiah son of God or an anti-Messiah (2:18-28) when we face a crisis (in this case the imminent destruction of the temple and the Jewish state).
In this section of eleven verses (2:29-3:10) there are six references to being born as children of God, and six references to those who are still children of the devil. The work of Satan is "sinning from the beginning" (3:8), which is defined as refusing the family love of the children of God. In the first section we saw that John is not talking about sinless perfection (1:8). We all fail (1:10). But the children of the devil are those who adopt Satan's delight in lies: malicious accusation, creating guilt, murderous hatred, pride, mocking, dividing families, and the final darkness of death (as in Proverbs 6:17-19). This dark direction of life is impossible for those who have the Son of God's seed of eternal life growing in them (3:9).
Obviously being either a child of God, or a child of Satan, is not a physical or legal relationship. The child metaphor suggests two quite different directions of life. These were already known in the Old Testament: "The Lord watches over the way of the righteous, but the way of the wicked will perish" (Psalm 1:6). "The perverse are an abomination to the Lord, but the upright are his delight" (Proverbs 3:32). The mouth of the righteous is a fountain of life, but the mouth of the wicked conceals violence" (Proverbs 10:11).
Similarly John wants us to know that the new birth immediately effects a change in heart attitudes. "Everyone who keeps doing (Greek present continuous) what is righteous has been born of him" (1 John 2:29). "Those who have been born of God do not keep sinning (1 John 3:9).
3:1 In his Gospel John had explained that God's love gave us his Son (John 3:16), and "to all who received him (the Messiah Son of God), who believed in his name, he gave power to become children of God" (John 1:12). Now John adds that we are not only called children of God, but we know we are (as in 2:29). The verse goes on to say that worldly people find it hard to understand our assurance because they do not know God our Father.
3:2 Like a child who has been adopted into a wonderful family, we already have the experience of being children of God. But that is only the beginning. It has not yet been revealed (we cannot yet conceive) what we will become in God's family (as in 1 Corinthians 2:9). But as the Spirit begins to change us, we know that the end result will be that we will be like him. As Paul explained, it is by "seeing the glory of the Lord as though reflected in a mirror, we are being transformed into the same image from one degree of glory to another; for this comes from the Lord, the Spirit" (2 Corinthians 3:18).
3:3 There are a whole group of Greek verbs, nouns and adjectives (agiazo, agiasmos, agios, agiotys, agnizo, agnos - the last two of these are used in this verse) which are connected with the idea of holiness, or sanctification. These are nothing to do with saints in stained glass windows. The New Testament meaning is taken from the Old Testament idea of something or someone set aside from ordinary use for a special purpose in God's service. So those who have the certainty of being transformed to become like the Messiah Son of God (3:2) set themselves aside from other lesser purposes for this agenda. Similarly Paul says "Now in the Lord you are children of light. Live as children of light (Ephesians 5:8)
3:4 There are however others who set themselves aside for Satan's unholy purposes as listed above (lies, malicious accusation, creating guilt, murderous hatred, pride, mocking, dividing families, and the final darkness of death). John calls this unsanctified heart direction "lawlessness."
3:5 The Messiah Son of God takes away our sins (the wrong attitudes and behavior that need to be changed) by the Holy Spirit (as we will see in 3:24, 4:13).
3:6 That means that those who abide in (see, know) the Messiah do not continue unchanged in the wrong attitudes and behavior.
3:7 The Greek text is "Everyone who does the righteousness." Righteousness (dikaios and dikaiosune are often wrongly translated as the legal state of justification). But here it is a matter of attitudes and behavior, not a merely legal status (see 2:29).
3:8 On the other hand "he who keeps (Greek present continuous tense) doing sin (as opposed to "purify themselves" 3:3) is motivated by Satan, because that is Satan's purpose" (as in 3:4). And the Son of God came to terminate" (loose, annul, do away with) Satan's destructive purpose..
3:9 This means that "every person who has been born of God does not keep doing sin because the seed (life principle) of the Son is in him or her, and that makes continuing in sin impossible because the person has been born of God" (literal translation).
3:10a This then is how the children of God and the children of Satan can be identified. Those who are committed to satanic evil are certainly not from God.