A crystal is mined from a Crystal Ore. You can use them to make a crystal blade which is the strongest sword in the game. It is also a storyline-based item, where the player must collect 10 crystals scattered across island 3 and use them for a teleport. These crystals are very heavily guarded by Raptors.
Crystal
Crystals can also be sold to Pirate to get 8 bags of gold.