If I'm understanding this right, that means that if an otherwise active account gets a zero balance that carries over the blockchain pruning event, then the public key will be erased from the blockchain? Or am I misunderstanding?
I don't think doing this during blockchain pruning is a good idea. Just sent everything below 1 NXT as a fee, automatically. Don't accept transactions to other accounts if their balance would be lower than 1 NXT after this. This way, it's not possible to have lower balance.
Blockchain and balance sheet should be equivalent. Blockchain is an incremental update of balances, balance sheet is a consolidated version.
It's possible to accept lower balances, but at 0.01 NXT minimum balance maximum theoretical balance sheet size is 3.2TB.
Since there are less balances (44721 max) than accounts its better to have balances with accounts, not accounts with balances.
Am not quite getting this - is your figure of 44721 based upon a "current snapshot" - as I am talking about the theoretical maximum storage required for either 1M accounts or 1B accounts.
Actually it's 44720, sorry, didn't notice the rounding.
There are only 44720 different balances possible at the same time, for one billion coins, starting from 1, for integer balances. It's the sum of an arithmetic sequence summing to one billion.
For smallest increase 0.01, it's 447114 different balances possible at the same time, still with 1 NXT minimum balance.