What Tokens Are & Why It Matters
Your AI tool uses tokens to convert words into numbers, and every conversation you have with your AI has token limits. That why ChatGPT stops mid flight and tells you to come back later. It's why Claude, right in the middle of a Project chat, will shit itself!
Damn it! not again...😠
Tokens are the units that AI models like Claude use to process text. Think of them like "words" (though not exactly):
- "Hello" = 1 token
- "Hello, world!" = 4 tokens
- "Netherlands" = might be 3 tokens
- Code, file contents, and conversations all consume tokens
Why Token Efficiency Matters
  1. Conversation Length: Each conversation has a token budget (like 200,000 tokens). When you run out, the conversation ends or loses context.
  1. Performance: Fewer tokens = faster responses and lower costs
3. Context Preservation: Efficient token use means you can accomplish more complex tasks in a single conversation without hitting limits
4. Real Impact:
- Reading 10 unnecessary files might use 20,000 tokens
- Using an efficient search agent might use only 5,000 tokens
- That's 15,000 tokens saved for actual work!
I've prepared you this Token Efficiency Guide in markdown to help you develop a more efficient way of using Generative AI - it's FREE (open with textedit or any other text editing app). Edit according to your own needs and import to your projects.
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Larry Maguire
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What Tokens Are & Why It Matters
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