I'd like to be whitelisted, at least to post to the technical discussion forum. I've composed a fairly detailed question which I will paste below, but I think it's competent enough to benefit the general community if posted there. Thanks.

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Subject: What does my client know and how can it verify a transaction input?

Hi,

I’m new to Bitcoin, find it fascinating, and have been trying to understand how all the pieces work. Here are a few questions I’ve been wrestling with...

When I started the Bitcoin client for the first time it spent several hours downloading (I think) all the blocks. What exactly was it downloading? Was it the full data for every block with every committed transaction ever? Or was it something smaller, like maybe just a few important fields from the block? And related to this, how much of what my client downloaded did it retain? (E.g., does it download a lot of detail, verify it, and then keep just some hash of this, like say the Merkle tree?)

On a related note, how does my client verify that a transaction is good (if it’s even possible for it do this)? I know there are a lot of pieces to the verification but the particular point I’m wondering about is how it confirms that a particular transaction input is in fact the output of an earlier transaction. It seems to do this my client would either need to have (1) the full contents of the input’s block; or (2) the full Merkle tree of the input’s block; or (3) the Merkle root of the input’s block + the Merkle branch of the input transaction. (1) seems unlikely since that’s a lot of data (I believe this is what a “full node” has). (3) doesn’t seem possible because AFAICT the protocol for a transaction doesn’t allow for including a Merkle branch. So I guess then it’s either (2) or something else entirely.

Thanks for your help!