Scrypt is a password-based essential derivation function and a proof-of-work consensus hash function used for mining certain cryptocurrencies. It is another secure alternative to SHA-256 used by Bitcoin and has been widely adopted by leading blockchains, mainly Litecoin. The algorithm allows miners to contribute work for a chance to confirm a block of transactions and receive rewards.
Colin Percival created this algorithm in 2009. He originally meant it to be an online backup service for Tarsnap. Scrypt has the overarching objective of increasing the difficulty of conducting major custom hardware attacks. The key derivation function is intentionally computationally intensive. Users need only to perform the function once anytime they require authentication. However, external attempts to seize control must perform the key derivation function billions of times to get it right.
The extremely intensive operation would take a long time and cost plenty of computing resources. Suppose you were to think of Scrypt as a battle of attrition. In that case, it simply wears out potential hackers by exponentially increasing the resources it would take to attack a network successfully. The resource demands make it more effective compared to other password-based key derivation functions.
The Scrypt hash function works first by hashing the password. If the attacker already has the password file, they won’t immediately possess the password it contains. In the second step, it generates unique cryptographic keys needed to authenticate data.
Scrypt is efficient without compromising security. The hashing function is also less complex than alternatives. Adopting networks also enjoy relatively lower trading fees than ledgers adopting other hashing functions like SHA-256. The algorithm offers more flexible security with better resilience to brute force attacks. The main advantage over other hashing functions is that Scrypt’s security levels are adjustable and relatively secure. The flexibility in-built in Scrypt allows a programmer to adjust parameters as they deem fit, meeting their objectives. Because of this, Scrypt is considered one of the best algorithms for distributed systems demanding high security.
This algorithm has the advantage of being simpler than other mining algorithms. It emerged soon after Bitcoin launched, and the most appropriate comparison is to the SHA-256 consensus. A defining feature of Bitcoin mining is the energy-intensive nature of the mining. Scrypt improves the energy consumption of Bitcoin. Therefore, it is more energy efficient than SHA-256. Blockchains that rely on Scrypt are generally faster than Bitcoin and require lesser amounts in transaction fees.
Ultimately, this solution is famous for its security. Accordingly, Scrypt is a popular programming solution for encrypting wallets, files, and passwords.
In general, Scrypt is a useful solution for cryptocurrency networks. The proliferation of attacks and hacks in recent years has shown the need for robust security. This asset is unique because nefarious actors can target it from a remote location without the need for physical robbery. Therefore, protocols and platforms can use this solution to improve security and make it more difficult for hackers to seize digital assets. Scrypt will retain its presence in this space for the foreseeable future.