Is it possible for the network clients to just keep the latest network state (without keeping track of the past transactions) while not harming the network security? That is, is it really needed to keep the whole transaction history? I am aware that then it would not be possible to reconstruct the blockchain from the genesis block but is it really a big issue?
Thank you
Most Ethereum nodes already operate by having only the current state. This is also known as a full node. Full nodes may or may not include "logs" or Solidity event history, needed e.g. to show your past transactions in a wallet. By default, this history is disabled by GoEthereum node software and not available from many free RPC providers.
What you are describing is called an Archive node. A node launched normally keeps only the current state. For example, you cannot query past balances of Ethereum addresses. Archive node allows you to query the full transaction history.
