I am investigating whether a storage-constrained Bitcoin node could retain only the most recent (N) blocks, construct a partial UTXO set from those blocks, and use that partial UTXO set to independently validate newly received transactions.
The basic idea would be:
recent (N) blocks → construct a partial UTXO set → validate a new transaction locally if all of its input UTXOs are available in that partial set.
However, I see a potential bootstrap problem.
Suppose the node starts with only the most recent (N) blocks. Some transactions in the earliest retained blocks may spend outputs created before the retained window. Without the earlier UTXO state, the node cannot fully validate those inputs.
If the node therefore cannot fully validate those blocks, can it safely treat the outputs created by those blocks as valid UTXOs and progressively construct a partial UTXO set from them?
More generally:
Is it technically feasible for a Bitcoin node to construct a trustworthy partial UTXO set using only the most recent (N) blocks, without first obtaining a validated UTXO state at the beginning of the retained window?
If all inputs of a newly received transaction are present in such a partial UTXO set, would that be sufficient for the node to independently validate that transaction, or would the incomplete validation history of the partial UTXO set prevent this?
How is this different from the way a Bitcoin wallet maintains information about its own UTXOs? A wallet does not maintain the complete global UTXO set, so what provides the trust basis for the wallet’s view of its own unspent outputs?
If this approach is technically possible, why is recent-block-based partial UTXO construction not commonly used by lightweight Bitcoin nodes today? What are the main technical or security limitations?
I am particularly interested in the trust/validation issue rather than merely the storage savings.
