Yeah, I'm pretty sure this was suggested before or some version of it, I was more curious about the objections, so thank you guys for helping me understand. 

I see your point. I agree with you that trust would be less self-verifiable and delegated to an extent. The idea is that the hash would be verified against previous transactions up to the previous state, but the problem remains: how to verify the previous state?

Correct me if I'm wrong, but I understand trust here as being statistical, as in, "highly unlikely or computationally too demanding to be otherwise". By the same logic, how likely can the entire network be fooled into accepting a wrong but publicly verifiable state for a month or a year?

BlackHatCoiner, very good point about "trust but verify", I agree.

However, what if this consolidation happened every month or year, leaving everybody plenty of time to publicly verify previous states and transactions?

Regarding your example, I see why syncing the node with a network that limits itself to the last 1000 transactions would be a problem, but since past nodes never change, can't a verification on past nodes produce some publicly verifiable hash that can just be checked and everybody can just move on?

Hi, bitmover, thanks! I haven't heard of pruned nodes, I like the term "chainstate".

My question now is why does the network still need full nodes, I mean what's being checked against the full nodes that can't be checked or trusted on the information of the pruned nodes?

(Please forgive my lack of specific technical knowledge, my question is likely dumb, so help me understand why)

If the blockchain is a chain of transactions, and its purpose (among others) seems to be to avoid double spending, why can't it be regularly consolidated into a state condition (as in, "at this time, wallet1 has N bitcoins", "at this time, wallet2 has N bitcoins", etc. or however that information would be stored in the same/new blockchain) to save on space?

This consolidation would obviously have to be proven to be consistent with previous transaction history, but once it's done, it would be accepted and added to the blockchain.

Once a state is accepted and consolidated into the blockchain, I assume the entire history of transactions before that state could be discarded for most purposes.

If this consolidation happened, let's say, once a month, and only the record of transactions from the previous month and the previous state was kept, transactions would only need to be checked against this relatively small data set.

Does this make sense? What problems would arise from this that I'm not seeing? Thanks!