A token is how AI systems count language—roughly a word or word fragment—and every exchange you have with an AI consumes tokens from a limited budget, which is why conversations have hard limits and why each API call costs money. Understanding tokens helps you write more efficiently and predict when a conversation will start hitting walls.
Tokens are the small units of text that AI models process internally, where one token equals roughly three to four characters, meaning a single word can span one or two tokens and punctuation counts separately.
Knowing how tokens work helps you write more efficient prompts, avoid hitting context limits unexpectedly, and understand why longer conversations cost more when using paid AI APIs or tools with usage caps.
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