Scrypt is a key derivation function that is used to secure cryptocurrencies by requiring large amounts of memory for its operations, making it resistant to large-scale custom hardware attacks. It was designed to make brute-force attacks using custom hardware like ASICs (Application-Specific Integrated Circuits) expensive and thus less appealing to attackers.
Scrypt was first utilized in the Tarsnap online backup service and has been adopted by several cryptocurrencies as a proof-of-work algorithm, the most notable being Litecoin. The idea behind using Scrypt was to allow miners to mine Bitcoin and Litecoin simultaneously.
The algorithm takes a key, a salt, and a cost factor as inputs and produces a derived key. The cost factor controls how much computing time and memory is required to compute the derived key. By adjusting this factor, the difficulty of the algorithm can be increased as hardware improves, providing a level of future-proofing.
Scrypt is a cryptographic algorithm designed to be memory-intensive to prevent large-scale hardware attacks, thus providing a secure method for protecting sensitive data and securing cryptocurrencies.