Re: [Bitcoin-development] Protocol extensions

[Jordan Mack <jordanmack@parhelic.com>]

theymos' full node and lite node write up got me thinking.

There are two problems here that we are trying to solve:
- The scalability of broadcast messages.
- The resources required to sync and verify the block chain.

I see three distinct groups of clients:
- Miners (dedicated servers & desktops)
- Full (desktops)
- Lite (mobile devices)

To address scalability of broadcasting, there could be three separate 
modes of operation (or client types). Mining nodes would retain the 
complete block chain, and share all messages between other mining nodes. 
Full nodes would retain the complete block chain, receive new block 
information from mining nodes, and share block data between each other. 
Lite clients would not contain the block chain, or any broadcast 
messages, and would query against a full client for all actions.

Mining nodes would handle the brunt of the barrage of messages. All 
block and transaction messages would have to be broadcast across all 
mining nodes. This would be essentially the same as all clients 
currently operate today.

A full client would be one step down from a mining client. They only 
need new block data, and new transactions that pertain to them (for 
instant notification). All other broadcast data is irrelevant to them. 
They would get new block data from connections to mining nodes, or from 
other peer nodes. The transaction submission could be sent directly to a 
connected mining node, or bounced through other connected full nodes, 
with a random number hops. This would disassociate the IP from the 
transaction, similarly to Tor.

To address the need for instant transaction notification, without 
broadcasting to to everyone, notification messages would be sent 
directly from one full client to the other. This is where aliases come 
in. When an alias is resolved, it includes both a Bitcoin address, and a 
list of IPs to notify of the transaction. This reveals the IP of the 
sender and receiver to each other. If the sender or receiver wishes to 
remain anonymous, then they could opt out of notification, and wait for 
the transaction to appear in the block chain.

A lite client would connect to a "trusted" full client over an encrypted 
connection. This would essentially function as a remote control to a 
full client, and allow a user to send, receive, and confirm normally, 
but without the overhead. A full client could reside on the home 
computer or server, which is owned by the user. A hosted wallet could 
also be used just as easily.

I don't like the idea of a header only client, unless this is just an 
interim action until the full block chain is downloaded in the 
background. Development of these types of clients is probably 
inevitable, but I believe that this breaks the most fundamental aspects 
of Bitcoin's security model. If a client has only headers, it cannot do 
full verification, and it is trusting the data from random anonymous peers.