Skip the Hardware Upgrades—Prompt Caching Cuts LLM Costs 59%

Most engineering teams chase expensive infrastructure optimizations to reduce LLM costs, but the real savings come from prompt caching—Anthropic charges just $0.30/M tokens for cached reads versus $3.00/M for fresh input, a 10x difference. The critical mistake: dynamic content in system prompts (timestamps, user IDs, dates) breaks the cache on every request, forcing full-price charges. ProjectDiscovery's Neo security agent proved the fix: moving runtime state into user messages raised cache hit rates from 7% to 84%, delivering 59% cost reduction in weeks—demonstrating that prompt structure optimization outperforms infrastructure spending.