Scrypt is the name of a cryptographic algorithm.

The original Scrypt algorithm was created by Colin Percival, for an online backup service called Tarsnap. The technical definition of the Scrypt algorithm is that its a ‘password-based key derivation function’, which means that it derives a secret key from a password.

Percival deliberately designed the algorithm to be computationally intensive to perform, requiring a large amount of memory to perform. The purpose of this was to make brute force attacks more expensive to perform. The idea behind this is that a person who knows their password would be required to pay the computational cost of performing the mathematical operation once, which would be negligible, but a person trying to guess someone’s password would have to pay the computational cost many times, significantly adding to the cost and difficulty for the attacker.

Scrypt Cryptocurrency Mining algorithm

A modified version of the original Scrypt was used as a Proof of Work cryptocurrency mining algorithm by Litecoin in 2011.

This implementation was accomplished as a direct response to the increasing dominance of ASIC computers in Bitcoin mining. Bitcoin mining ASICs were designed specifically to perform the SHA-256 calculations required, and are able to comprehensively out-compete general purpose personal computers. This led to a dramatic centralization of Bitcoin mining with many players priced out of the market, along with an increased barrier to entry for new miners.

Litecoin aimed to make Cryptocurrency mining more accessible and more decentralized by being ‘ASIC-resistant’. Because Scrypt is ‘memory hard’, meaning it has high memory requirements, it is more suited to a general purpose processor and for this reason it was chosen for use by Litecoin.

Scrypt mining can be performed on a personal computer’s CPU, but can be performed even more effectively on a Graphics Processing Unit or GPU. As a result of this much of the early Scrypt mining was performed using graphics cards designed for gaming computers. Today, ASICs are available for Scrypt mining.

Since 2011 many other alt coins have adopted and adapted the Scrypt algorithm for both in Proof of Work and Proof of Stake systems

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