An Overview of The Scrypt Mining Algorithm

Beginner’s Guide / 08.10.2020

Data mining is crucial in ascertaining the integrity of transactions on the blockchain. Apart from it allowing for verification of transactions, it prevents double spend arresting fraudulent activity. The market is awash with crypto mining algorithms; each of them is fighting for market share, and like any other, the Scrypt mining algorithm is among them.

So what is Scrypt? What are its advantages and practical applications? Join us as we dissect this topic. First, though, let us briefly define it. Scrypt is a Password-based Key Derivative Function used in some blockchains adopting the Proof of Work protocol. It found prominence in cryptocurrencies via the Tenebrix project. Since then, it has seen wider adaptability enabling its three most essential blockchains to attain a market capitalization of over $3 billion in digital assets.

The Evolution Of Scrypt

Colin Percival developed Scrypt in 2009 for Tarsnap‘s online backup service. He designed it to be a memory-hard algorithm that improved network security by preventing large scale custom hardware attacks. As the attacks would require large amounts of RAM, they’d be costly to execute.

At that time, cryptocurrencies were yet to take off, and Scrypt’s application on Blockchain hadn’t been perceived previously. Picking from where Percival left off, other players found means of applying the algorithm to cryptocurrencies. One may look at Scrypt’s adoption to cryptos from two angles:

  • The pioneering projects 
  • The current projects utilizing Scrypt

Initial Applications To Cryptocurrencies

Two projects predominate this period; The Tenebrix and Fairbrix projects. The hits and misses of both initiatives laid the building blocks for increased usage of Scrypt in cryptocurrencies.

ArtForz, an anonymous programmer, developed Tenebrix in 2011; his project pioneered the use of Scrypt as a hashing algorithm. Although the project failed, it set a precedent by offering a CPU-friendly mining option to crypto enthusiasts seeing Tenebrix influence Scrypt-based projects and other ASICs resistant ones.

Later Charlie Lee would develop Fairbrix (FBX), a Terebrix (TBX) clone. His project encountered two significant issues., the first being that the coin’s client had a bug that prevented the creation of new coins. Second, the project suffered a 51% attack that led to a loss of 1,600 coins and its eventual death.

Undaunted by these misfortunes, Charlie Lee merged most of the work completed for FBX and combined it with  Bitcoin’s code to create Litecoin.

Current Projects Running On Scrypt

The pioneering works on Scrypt led to its successful adoption in later projects. Here then, are the most significant of this algorithm’s projects.

Litecoin (LTC)

Litecoin premiered in October 2011 forked on BTC. At the time, it boasted of being ASIC resistant. It employed the following parameters N=1024, r= 1and p=1. These contradicted C. Perceival’s parameters that had proposed r=8 that would force miners to use more RAM, theoretically curtailing ASICs dominance of the network.

In defense, Charlie Lee held that more memory hash parameters would slow the network’s client. While testing with more brutal parameters, he found out that the client would freeze on introducing a new block. Therefore, using less intense parameters improved user experience.

At that time, no Scrypt-mining capable GPU, ASIC, or FPGA existed, with mining as CPU only. May 2014 saw the introduction of ASIC Scrypt mining rigs and LTCs shift from ASIC resistance. ASIC Scrypt mining is widely accepted within LTC mining communities, as it helps secure the network


Dogecoin is a joke that went wrong, albeit to good ends. Established in 2013 as a hard fork of LTC, it started as a “joke currency.” However, it gained popularity, attaining a large market capitalization after a TikTok pump.

DOGE‘s parameters differ from LTC’s, with its block time at one minute and LTCs block time is 2.5 minutes

Thanks to a threat of a 51% attack on its networks, LTCs C.Lee proposed merged mining between the two networks. The merger materialized in July 2014, allowing for the simultaneous mining of both coins. Likewise, both systems have high correlation coefficients for mining difficulties and hash rates.


Einsteinium Is a fork of Bitcoin’s source code that launched in March 2014. It adopts Scypt instead of SHA-256. Further, it uses Kimoto Gravity Well to level the mining playing field and check the growth in multipool mining.

The network has a 50% block reduction and a 60-second block time. Its delayed Proof of Work (dPoW) heightens its resistance to a 51% attack through notarization of BTCs hash rate. As such, the cost of an hour’s attack on the network equates to a similar attack on BTC.

What are the Advantages and Applications of Scrypt

Scrypt is advantageous in the following ways:

  • It is a secure algorithm impervious to brute force attacks as the computational difficulty of executing an attack on it renders the activity dear.
  • It is cheaper to transact on Scrypt-based networks compared to doing so on BTC.
  • Mining blocks on Scrypt is four times faster than on BTC. Its mining range is in Kilohashes per second to Megahashes per second compared to SHA-256, which is in Terahashes, ensuring faster transaction turnarounds.
  • It consumes less power. Scrypt’s design mitigates dominance by ASICs, and as such, it tends to use up less energy than using SHA-256; most individual miners favor it.
  • Scrypt levels the mining playing field. It negates the advantages of large mining pools or ASICS over standard CPU/GPU mining.

The Scrypt algorithm is useful in the following ways:

  • Many cryptocurrencies adopting a PoW protocol use it.
  • Its robust security capabilities make it ideal for encrypting online wallets, files, and passwords. 


Crypto mining algorithms are as diverse as there are multiple coins in existence and more under development. Each of these algorithms is fighting for market share. Although SHA-256 is the most dominant one, other important players are catering to the diversified crypto market. 

Scrypt is one such algorithm. Although initially intended for a different pur[ose, it has found its footing in the world of cryptocurrencies. Despite its native lightweight design, it packs quite some punch functionally. It is a welcome alternative to users looking for a different offering and finds application in encrypting wallets, files, and application passwords.

Adam is an outgoing young lad who likes adventures and discovering new things. Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.