user6838: I saw in some places that Scrypt uses a lot of memory, therefore a good supply of system RAM is needed to hash with it. however, I saw in other places stating that is ONLY uses L2 Memory.
which one does it use?

user11862: Litecoin use scrypt with 128 KB of memory (source), therefore it can be stored in the CPU cache.
Scrypt is a sequential memory-hard hash function. You can tell it, how much memory it should use to generate a hash. You can even tell it to use GBs, in fact. The problem is, you always need that much memory to verify a hash. This will make hardware very expensive and the generation rate will be much lower.

user85: The amount of memory that scrypt uses can be adjusted to get the desired behavior. If a particular CPU has enough L2 memory to hold all that's needed for a particular scrypt use case, then the performance of system memory will not be relevant. Scrypt-based coins can increase the memory requirements dynamically as one way of increasing the mining difficulty.

6838: <p>I saw in some places that Scrypt uses a lot of memory, therefore a good supply of system RAM is needed to hash with it. however, I saw in other places stating that is ONLY uses L2 Memory.
which one does it use?</p>
 11862: <p>Litecoin use scrypt with 128 KB of memory (<a href="http://en.wikipedia.org/wiki/Scrypt#Litecoin_proof-of-work" rel="nofollow">source</a>), therefore it can be stored in the CPU cache.</p>

<p>Scrypt is a sequential memory-hard hash function. You can tell it, how much memory it should use to generate a hash. You can even tell it to use GBs, in fact. The problem is, you always need that much memory to verify a hash. This will make hardware very expensive and the generation rate will be much lower.</p>
 85: <p>The amount of memory that scrypt uses can be adjusted to get the desired behavior. If a particular CPU has enough L2 memory to hold all that's needed for a particular scrypt use case, then the performance of system memory will not be relevant. Scrypt-based coins can increase the memory requirements dynamically as one way of increasing the mining difficulty.</p>
