[wc-]

Someone more familiar with this than me feel free to correct me here, but this is my basic understanding:

If you think of your bitcoins as following a path from address to address, the pruning process would retain the final node or two on that path but discard any previous nodes. So your 10 year old bitcoins at address X are still the most recent node on that chain and are kept around. However, once they are finally sent to another address the bits recording your current address can be forgotten.

[TD-Linux]

In Bitcoin, these final nodes are called UTXOs (unspent transaction outputs), and indeed if you use chain pruning or a light client, they are all you need. They also need to be searched quickly to verify transactions, so they are usually kept in RAM. Because they cannot be pruned, there is a soft fork being developed called SegWit that changes the accounting so that transactions cost more if they create many unspent outputs, or cost less if they spend more outputs than they create.

[artursapek]

Yep. If people are familiar with Redis, it would be much like how Redis periodically rewrites its append-only-file to make it smaller. So you go from a file with full history like

    SET a 2
    SET b 4
    SET a 6
    SET b 10
    SET a 20

to just

    SET a 20
    SET b 10

The snapshot would just retain resulting balances at a certain block height, and no history of how they got there (previous transactions). If people wanted that history it could obviously be archived and accessed separately.

[aeijdenberg]

Would be interested in your feedback on Verifiable Maps as implemented at https://www.continusec.com/ which can give verifiable answers to specific questions such as what is the current balance as well as a full history log of all mutations to the map.