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What Is the Scrypt Algorithm? Proof-of-Work Explained
Scrypt is a memory-intensive proof-of-work hashing algorithm used to secure Litecoin, Dogecoin and many related coins; it was designed to be harder to accelerate with specialized chips than Bitcoin's SHA-256.
Key takeaways
- Scrypt is a proof-of-work algorithm: miners compete to find hashes that meet the network's difficulty target.
- It was designed to be memory-hard, originally to slow the rise of specialized mining hardware.
- Scrypt ASICs now exist and dominate Scrypt mining, much as SHA-256 ASICs dominate Bitcoin.
- Litecoin, Dogecoin and a family of related coins can be mined with the same Scrypt hardware.
What Scrypt is
Scrypt is a password-based key derivation function created by Colin Percival in 2009. Its defining feature is that computing it needs a significant amount of memory as well as processing, not just raw compute. Litecoin adopted it as its proof-of-work function in 2011 with the aim of making mining less dominated by specialized hardware than Bitcoin's SHA-256.
How proof of work uses it
Miners repeatedly hash block candidates with different nonces using Scrypt. A block is valid when the resulting hash is below the network's difficulty target. Finding one is trial and error, so the more hashing power you have, the more likely you are to find blocks. The network adjusts difficulty so blocks arrive at a target interval regardless of total hashrate.
Scrypt vs SHA-256
- SHA-256 (Bitcoin): light on memory, extremely easy to parallelize in hardware
- Scrypt (Litecoin, Dogecoin): needs much more memory per hash, which initially made GPUs competitive and ASICs harder to build
That advantage didn't last: dedicated Scrypt ASICs appeared and are now the standard for serious mining. GPU mining of Scrypt coins is generally no longer competitive.
The Scrypt coin family
Because Litecoin and Dogecoin share the algorithm, the same hardware can mine both — and through merged mining, one stream of hashes can secure several Scrypt-based chains at once. That shared-hash property is what makes the Scrypt ecosystem attractive to miners.
What to check as a miner
Look at real hashrate, power draw and your electricity cost — not just headline specs — and model your own numbers before buying hardware.
Example
A Scrypt ASIC rated around 9 GH/s hashes Litecoin block candidates using the Scrypt function. Pointed at a merged-mining pool, the same work can also count toward Dogecoin and other Scrypt-based coins.
Put it into practice
Check the numbers, then get paid to a wallet you control
Run your own hashrate and power cost through the Scrypt mining calculator, then use Scrypt Wallet to receive Litecoin, Dogecoin and other Scrypt-family payouts directly to keys only you hold.
Open the mining calculator Get Scrypt for AndroidFrequently asked questions
Which coins use the Scrypt algorithm?
Litecoin and Dogecoin are the best known, along with a family of related coins such as Bellscoin, Dingocoin, Shibacoin and Pepecoin, several of which can be merge-mined with Litecoin.
Can I mine Scrypt with a GPU?
It's technically possible but no longer competitive against dedicated Scrypt ASICs for most coins.
Is Scrypt the same as SHA-256?
No. Both are proof-of-work hash functions, but Scrypt needs much more memory per hash, which changes the hardware it runs on.
Written by the Scrypt Wallet team · Updated 2026-09-29. General education, not financial, tax or legal advice.