Claude Code utilizes a prompt caching mechanism to reduce token costs for ongoing conversations. This feature caches the initial prompt and subsequent turns, with cached content billed at a significantly reduced rate. However, if a conversation exceeds the cache's time-to-live (TTL) or if the prompt prefix is altered, the cache is invalidated, leading to full token costs for the entire context. The default TTL varies based on authentication method, with subscription users typically benefiting from a longer 1-hour TTL, while API-based setups default to 5 minutes. AI
IMPACT Understanding Claude Code's prompt caching can help users optimize token usage and reduce costs for extended conversations.
RANK_REASON The item details a specific feature of a product (Claude Code) and its cost implications, rather than a new release or major industry event.
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