What is Scrypt?

Back to Glossary

Scrypt is an algorithm for cryptocurrency mining and alternative to the SHA-256 algorithm used to mine Bitcoin. Like SHA-256, Scrypt is an example of a proof-of-work (PoW) algorithm. This means that network participants called miners must compete to create new coins while also helping to secure the network.

Scrypt is currently the de facto algorithm for Litecoin mining. 

Benefits of Scrypt over SHA-256: 

Unlike SHA-256, Scrypt relies on miners competing based on the memory of their CPU as opposed to pure CPU power. This increases network participation and makes mining more democratized and available to regular individuals. Litecoin initially adopted Scrypt to discourage the reliance on expensive ASIC mining hardware and allow ordinary people with lower budgets to mine Litecoin. However, due to the competitive nature of the field, the majority of Scrypt mining is now done on specialized ASIC computers. 

Scrypt is also less energy-intensive and thus considered by some to be more environmentally friendly than SHA-256, which relies on heavy energy usage. 

Drawbacks of Scrypt compared to SHA-256: 

Less energy usage can be a double-edged sword as it also means there is less energy involved in protecting the network. For this reason many consider Scrypt to be less secure than its SHA-256 cousin. 

As mentioned, Scrypt also still relies heavily on ASICs for profitable mining which makes means the availability of mining is not as differentiated from SHA-256 as was originally intended.