BIP 16, introduced in BIP-16, replaced the older Pay-to-PubKeyHash approach in many cases by allowing funds to be sent to the hash of a script rather than directly to a public key. This means the transaction creator doesn’t need to know the script’s details; the spender later reveals the full script to claim those coins.

P2SH not only simplifies complex scripts (like multisig) for senders but also preserves privacy until funds are spent. This design cut down on transaction complexity for standard users and paved the way for more advanced scripting scenarios without cluttering up the blockchain with large scripts at the time of sending.