Advantages of implementing P2SH
P2SH activation gives you allows users of the Bitcoin system to carry out or receive transactions in multi-signature addresses. In fact, this is the most common application known for the P2SH format. Because P2SH-formatted addresses are designed to support a set of signatures that is equal to or less than the number of private keys that are linked to or associated with them. That is, in a multi-signature address that has 3 associated keys, the 3 keys can be the signatories, or failing that only 2 or 1 of them.
Moreover, Bitcoin addresses that use the P2SH format are easily identified as they start with number 3. But even though it's often used to create multi-signature addresses, it doesn't always mean that an address starts with this number that it is a multi-signature address. An address starting with number 3 will always be a P2SH address, but it will not always be a multi-signature address.
Security and Privacy
Through the P2SH format a user can finance any script without knowing what are the spending conditions that are linked to that script. In other words, the user can send or share the scripts associated with a transaction without having partial or total knowledge about the configuration of these conditions or security instructions.
Therefore, in the case of being a sender, the user will only have to send the transactions they wish to carry out to the P2SH address. No need to know how the funds you have sent will be spent. While in the case of being a recipient or recipient, the user must know the conditions of expenses associated with that transaction. That can vary between the need for a multi-signature, password or another, to be able to access the cryptocurrencies that have been sent to you.
Likewise, if the P2SH blocking script only contains one hash of the script, it is impossible to know what type of script comes from that hash. Making it impossible for a user to know if a transaction comes from a particular address or a multi-signature.
Smaller unspent outlets
Like all unspent outlets or utxos Bitcoin are stored in the RAM of the nodes, it is important to save this storage space. Thus, by employing P2SH blocking scripts with smaller sequences, the UTXOs will require less space to be stored, allowing the nodes to be computationally more efficient and to work in an agile and competent way in the validation of network transactions.
Lower commission rates
Since the commission rates that are charged in Bitcoin are not related to the amounts transferred but to the size of the transactions, a script hash with a shorter length allows the sender of a transaction to be able to send their funds to P2SH addresses without having to have to pay high commission fees. As it would happen in the case of using the complete scripts.
Although this may not be a serious problem today, it may be in the future; when mining rewards are reduced and nodes are maintained at transaction commission rates.
P2SH format addresses support both addresses followed as with those that are not. So users can easily send their funds and transact in both wallets.
Disadvantages of P2SH implementation
The truth is that P2SH has very few disadvantages or limitations. Because P2SH was implemented time after the development of the original Bitcoin scripts, so the developers had the opportunity to correct the limitations that were presented on the network at that time. However, the limitations of P2SH are:
P2SH takes up more space within the blockchain. This can lead to congestion and influence the network's operating capacity. This is because during the blocking of bitcoins in P2SH 25 more bytes are added to the original script, leaving a multi-signature 2 of 3 script that uses P2SH with 278 bytes. Compared to the 253 bytes that the same 2 of 3 multi-signature script would have using P2MS.