In cryptography, scrypt (pronounced "ess crypt"[1]) is a password-based key derivation function created by Colin Percival in March 2009, originally for the Tarsnap online backup service.
[2][3] The algorithm was specifically designed to make it costly to perform large-scale custom hardware attacks by requiring large amounts of memory.
[4] A simplified version of scrypt is used as a proof-of-work scheme by a number of cryptocurrencies, first implemented by an anonymous programmer called ArtForz in Tenebrix and followed by Fairbrix and Litecoin soon after.
Previous password-based KDFs (such as the popular PBKDF2 from RSA Laboratories) have relatively low resource demands, meaning they do not require elaborate hardware or very much memory to perform.
It was first implemented for Tenebrix (released in September 2011) and served as the basis for Litecoin and Dogecoin, which also adopted its scrypt algorithm.
[9] This led to shortages of high end GPUs due to the rising price of these currencies in the months of November and December 2013.