Utreexo

• From a transcript (Summer 2019) by Andrew Poelstra (Blockstream) and David Vorick (Sia) on scaling:

"Utreexo out of all of these are the most practical and most realistic of the speculative improvements. Today one of the big bottlenecks with bitcoin is blockchain validation. In particular, you need a ton of disk space and you need to keep track of the set of coins that are currently spendable. With utreexo, we merkleize this whole thing and we keep one merkle root and we get rid of the need to keep a database. Today to run bitcoin consensus, you need database software and keeping things on disk. That's rough. Database optimization is incredibly involved and it's difficult to be certain that it's implemented correctly. If we switch to utreexo, then we can throw away our database software. Every time someone spends, they would provide a merkle proof showing that the coin was in the merkle root. This allows us to essentially keep things on disk. We can fit an entire blockchain validator on a single ASIC. We could create a chip that can validate the bitcoin blockchain just as fast as you can download it. The major tradeoff is that every transaction needs a merkle proof alongside it, which is a couple hundred bytes. There's a few ways to help with that though.

Utreexo proofs could be replaced with STARK proofs. The utreexo proofs are small, but STARKs could do aggregation of those."