Pay to script hash (P2SH)

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Pay-to-Script-hash, or P2SH, are extension of the multisignature idea but reducing the burden on the Bitcoin infrastructure in terms of storage required. A common 2-of-3 multisignature transaction can take up to five times as much space as a simple pay to address or pay to public key transaction.

They also reduce the complexity of the encoding, and shift the burden in terms of fees from the sender to the recipient – after all it’s their request to have the complexity in the conditions for the release of the funds.

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