wip

15 files changed, 675 insertions, 128 deletions

diff --git a/core/block_processor.go b/core/block_processor.go
index 7eaeb5be0..34c12729c 100644
--- a/core/block_processor.go
+++ b/core/block_processor.go
@@ -12,7 +12,6 @@ import (
 	"github.com/ethereum/go-ethereum/event"
 	"github.com/ethereum/go-ethereum/logger"
 	"github.com/ethereum/go-ethereum/pow"
-	"github.com/ethereum/go-ethereum/pow/ezp"
 	"github.com/ethereum/go-ethereum/state"
 	"gopkg.in/fatih/set.v0"
 )
@@ -46,11 +45,11 @@ type BlockProcessor struct {
 	eventMux *event.TypeMux
 }
 
-func NewBlockProcessor(db ethutil.Database, txpool *TxPool, chainManager *ChainManager, eventMux *event.TypeMux) *BlockProcessor {
+func NewBlockProcessor(db ethutil.Database, pow pow.PoW, txpool *TxPool, chainManager *ChainManager, eventMux *event.TypeMux) *BlockProcessor {
 	sm := &BlockProcessor{
 		db:       db,
 		mem:      make(map[string]*big.Int),
-		Pow:      ezp.New(),
+		Pow:      pow,
 		bc:       chainManager,
 		eventMux: eventMux,
 		txpool:   txpool,
@@ -105,6 +104,9 @@ func (self *BlockProcessor) ApplyTransaction(coinbase *state.StateObject, stated
 
 	return receipt, txGas, err
 }
+func (self *BlockProcessor) ChainManager() *ChainManager {
+	return self.bc
+}
 
 func (self *BlockProcessor) ApplyTransactions(coinbase *state.StateObject, statedb *state.StateDB, block *types.Block, txs types.Transactions, transientProcess bool) (types.Receipts, types.Transactions, types.Transactions, types.Transactions, error) {
 	var (
@@ -174,10 +176,15 @@ func (sm *BlockProcessor) processWithParent(block, parent *types.Block) (td *big
 	state := state.New(parent.Root(), sm.db)
 
 	// Block validation
-	if err = sm.ValidateBlock(block, parent); err != nil {
+	if err = sm.ValidateHeader(block.Header(), parent.Header()); err != nil {
 		return
 	}
 
+	// There can be at most two uncles
+	if len(block.Uncles()) > 2 {
+		return nil, ValidationError("Block can only contain one uncle (contained %v)", len(block.Uncles()))
+	}
+
 	receipts, err := sm.TransitionState(state, parent, block, false)
 	if err != nil {
 		return
@@ -204,7 +211,6 @@ func (sm *BlockProcessor) processWithParent(block, parent *types.Block) (td *big
 	// Tre receipt Trie's root (R = (Tr [[H1, R1], ... [Hn, R1]]))
 	receiptSha := types.DeriveSha(receipts)
 	if bytes.Compare(receiptSha, header.ReceiptHash) != 0 {
-		fmt.Println("receipts", receipts)
 		err = fmt.Errorf("validating receipt root. received=%x got=%x", header.ReceiptHash, receiptSha)
 		return
 	}
@@ -237,36 +243,38 @@ func (sm *BlockProcessor) processWithParent(block, parent *types.Block) (td *big
 // Validates the current block. Returns an error if the block was invalid,
 // an uncle or anything that isn't on the current block chain.
 // Validation validates easy over difficult (dagger takes longer time = difficult)
-func (sm *BlockProcessor) ValidateBlock(block, parent *types.Block) error {
-	if len(block.Header().Extra) > 1024 {
-		return fmt.Errorf("Block extra data too long (%d)", len(block.Header().Extra))
+func (sm *BlockProcessor) ValidateHeader(block, parent *types.Header) error {
+	if len(block.Extra) > 1024 {
+		return fmt.Errorf("Block extra data too long (%d)", len(block.Extra))
 	}
 
 	expd := CalcDifficulty(block, parent)
-	if expd.Cmp(block.Header().Difficulty) != 0 {
-		return fmt.Errorf("Difficulty check failed for block %v, %v", block.Header().Difficulty, expd)
+	if expd.Cmp(block.Difficulty) != 0 {
+		return fmt.Errorf("Difficulty check failed for block %v, %v", block.Difficulty, expd)
 	}
 
-	expl := CalcGasLimit(parent, block)
-	if expl.Cmp(block.Header().GasLimit) != 0 {
-		return fmt.Errorf("GasLimit check failed for block %v, %v", block.Header().GasLimit, expl)
+	// block.gasLimit - parent.gasLimit <= parent.gasLimit / 1024
+	a := new(big.Int).Sub(block.GasLimit, parent.GasLimit)
+	b := new(big.Int).Div(parent.GasLimit, big.NewInt(1024))
+	if a.Cmp(b) > 0 {
+		return fmt.Errorf("GasLimit check failed for block %v (%v > %v)", block.GasLimit, a, b)
 	}
 
-	if block.Time() < parent.Time() {
-		return ValidationError("Block timestamp not after prev block (%v - %v)", block.Header().Time, parent.Header().Time)
+	if block.Time <= parent.Time {
+		return ValidationError("Block timestamp not after or equal to prev block (%v - %v)", block.Time, parent.Time)
 	}
 
-	if block.Time() > time.Now().Unix() {
+	if int64(block.Time) > time.Now().Unix() {
 		return BlockFutureErr
 	}
 
-	if new(big.Int).Sub(block.Number(), parent.Number()).Cmp(big.NewInt(1)) != 0 {
+	if new(big.Int).Sub(block.Number, parent.Number).Cmp(big.NewInt(1)) != 0 {
 		return BlockNumberErr
 	}
 
 	// Verify the nonce of the block. Return an error if it's not valid
-	if !sm.Pow.Verify(block) {
-		return ValidationError("Block's nonce is invalid (= %v)", ethutil.Bytes2Hex(block.Header().Nonce))
+	if !sm.Pow.Verify(types.NewBlockWithHeader(block)) {
+		return ValidationError("Block's nonce is invalid (= %x)", block.Nonce)
 	}
 
 	return nil
@@ -276,25 +284,41 @@ func (sm *BlockProcessor) AccumulateRewards(statedb *state.StateDB, block, paren
 	reward := new(big.Int).Set(BlockReward)
 
 	ancestors := set.New()
+	uncles := set.New()
+	ancestorHeaders := make(map[string]*types.Header)
 	for _, ancestor := range sm.bc.GetAncestors(block, 7) {
-		ancestors.Add(string(ancestor.Hash()))
+		hash := string(ancestor.Hash())
+		ancestorHeaders[hash] = ancestor.Header()
+		ancestors.Add(hash)
+		// Include ancestors uncles in the uncle set. Uncles must be unique.
+		for _, uncle := range ancestor.Uncles() {
+			uncles.Add(string(uncle.Hash()))
+		}
 	}
 
-	uncles := set.New()
 	uncles.Add(string(block.Hash()))
 	for _, uncle := range block.Uncles() {
 		if uncles.Has(string(uncle.Hash())) {
 			// Error not unique
 			return UncleError("Uncle not unique")
 		}
+
 		uncles.Add(string(uncle.Hash()))
 
+		if ancestors.Has(string(uncle.Hash())) {
+			return UncleError("Uncle is ancestor")
+		}
+
 		if !ancestors.Has(string(uncle.ParentHash)) {
 			return UncleError(fmt.Sprintf("Uncle's parent unknown (%x)", uncle.ParentHash[0:4]))
 		}
 
+		if err := sm.ValidateHeader(uncle, ancestorHeaders[string(uncle.ParentHash)]); err != nil {
+			return ValidationError(fmt.Sprintf("%v", err))
+		}
+
 		if !sm.Pow.Verify(types.NewBlockWithHeader(uncle)) {
-			return ValidationError("Uncle's nonce is invalid (= %v)", ethutil.Bytes2Hex(uncle.Nonce))
+			return ValidationError("Uncle's nonce is invalid (= %x)", uncle.Nonce)
 		}
 
 		r := new(big.Int)
diff --git a/core/block_processor_test.go b/core/block_processor_test.go
index 35aeaa714..a031c2669 100644
--- a/core/block_processor_test.go
+++ b/core/block_processor_test.go
@@ -6,14 +6,15 @@ import (
 
 	"github.com/ethereum/go-ethereum/ethdb"
 	"github.com/ethereum/go-ethereum/event"
+	"github.com/ethereum/go-ethereum/pow/ezp"
 )
 
 func proc() (*BlockProcessor, *ChainManager) {
 	db, _ := ethdb.NewMemDatabase()
 	var mux event.TypeMux
 
-	chainMan := NewChainManager(db, &mux)
-	return NewBlockProcessor(db, nil, chainMan, &mux), chainMan
+	chainMan := NewChainManager(db, db, &mux)
+	return NewBlockProcessor(db, ezp.New(), nil, chainMan, &mux), chainMan
 }
 
 func TestNumber(t *testing.T) {
@@ -21,13 +22,13 @@ func TestNumber(t *testing.T) {
 	block1 := chain.NewBlock(nil)
 	block1.Header().Number = big.NewInt(3)
 
-	err := bp.ValidateBlock(block1, chain.Genesis())
+	err := bp.ValidateHeader(block1.Header(), chain.Genesis().Header())
 	if err != BlockNumberErr {
 		t.Errorf("expected block number error")
 	}
 
 	block1 = chain.NewBlock(nil)
-	err = bp.ValidateBlock(block1, chain.Genesis())
+	err = bp.ValidateHeader(block1.Header(), chain.Genesis().Header())
 	if err == BlockNumberErr {
 		t.Errorf("didn't expect block number error")
 	}
diff --git a/core/chain_makers.go b/core/chain_makers.go
new file mode 100644
index 000000000..b5c50dc3d
--- /dev/null
+++ b/core/chain_makers.go
@@ -0,0 +1,142 @@
+package core
+
+import (
+	"fmt"
+	"math/big"
+
+	"github.com/ethereum/go-ethereum/core/types"
+	"github.com/ethereum/go-ethereum/ethutil"
+	"github.com/ethereum/go-ethereum/event"
+	"github.com/ethereum/go-ethereum/pow"
+	"github.com/ethereum/go-ethereum/state"
+)
+
+// So we can generate blocks easily
+type FakePow struct{}
+
+func (f FakePow) Search(block pow.Block, stop <-chan struct{}) (uint64, []byte, []byte) {
+	return 0, nil, nil
+}
+func (f FakePow) Verify(block pow.Block) bool { return true }
+func (f FakePow) GetHashrate() int64          { return 0 }
+func (f FakePow) Turbo(bool)                  {}
+
+// So we can deterministically seed different blockchains
+var (
+	CanonicalSeed = 1
+	ForkSeed      = 2
+)
+
+// Utility functions for making chains on the fly
+// Exposed for sake of testing from other packages (eg. go-ethash)
+func NewBlockFromParent(addr []byte, parent *types.Block) *types.Block {
+	return newBlockFromParent(addr, parent)
+}
+
+func MakeBlock(bman *BlockProcessor, parent *types.Block, i int, db ethutil.Database, seed int) *types.Block {
+	return makeBlock(bman, parent, i, db, seed)
+}
+
+func MakeChain(bman *BlockProcessor, parent *types.Block, max int, db ethutil.Database, seed int) types.Blocks {
+	return makeChain(bman, parent, max, db, seed)
+}
+
+func NewChainMan(block *types.Block, eventMux *event.TypeMux, db ethutil.Database) *ChainManager {
+	return newChainManager(block, eventMux, db)
+}
+
+func NewBlockProc(db ethutil.Database, txpool *TxPool, cman *ChainManager, eventMux *event.TypeMux) *BlockProcessor {
+	return newBlockProcessor(db, txpool, cman, eventMux)
+}
+
+func NewCanonical(n int, db ethutil.Database) (*BlockProcessor, error) {
+	return newCanonical(n, db)
+}
+
+// block time is fixed at 10 seconds
+func newBlockFromParent(addr []byte, parent *types.Block) *types.Block {
+	block := types.NewBlock(parent.Hash(), addr, parent.Root(), ethutil.BigPow(2, 32), 0, "")
+	block.SetUncles(nil)
+	block.SetTransactions(nil)
+	block.SetReceipts(nil)
+
+	header := block.Header()
+	header.Difficulty = CalcDifficulty(block.Header(), parent.Header())
+	header.Number = new(big.Int).Add(parent.Header().Number, ethutil.Big1)
+	header.Time = parent.Header().Time + 10
+	header.GasLimit = CalcGasLimit(parent, block)
+
+	block.Td = parent.Td
+
+	return block
+}
+
+// Actually make a block by simulating what miner would do
+// we seed chains by the first byte of the coinbase
+func makeBlock(bman *BlockProcessor, parent *types.Block, i int, db ethutil.Database, seed int) *types.Block {
+	addr := ethutil.LeftPadBytes([]byte{byte(i)}, 20)
+	addr[0] = byte(seed)
+	block := newBlockFromParent(addr, parent)
+	state := state.New(block.Root(), db)
+	cbase := state.GetOrNewStateObject(addr)
+	cbase.SetGasPool(CalcGasLimit(parent, block))
+	cbase.AddBalance(BlockReward)
+	state.Update(ethutil.Big0)
+	block.SetRoot(state.Root())
+	return block
+}
+
+// Make a chain with real blocks
+// Runs ProcessWithParent to get proper state roots
+func makeChain(bman *BlockProcessor, parent *types.Block, max int, db ethutil.Database, seed int) types.Blocks {
+	bman.bc.currentBlock = parent
+	blocks := make(types.Blocks, max)
+	for i := 0; i < max; i++ {
+		block := makeBlock(bman, parent, i, db, seed)
+		td, err := bman.processWithParent(block, parent)
+		if err != nil {
+			fmt.Println("process with parent failed", err)
+			panic(err)
+		}
+		block.Td = td
+		blocks[i] = block
+		parent = block
+	}
+	return blocks
+}
+
+// Create a new chain manager starting from given block
+// Effectively a fork factory
+func newChainManager(block *types.Block, eventMux *event.TypeMux, db ethutil.Database) *ChainManager {
+	bc := &ChainManager{blockDb: db, stateDb: db, genesisBlock: GenesisBlock(db), eventMux: eventMux}
+	if block == nil {
+		bc.Reset()
+	} else {
+		bc.currentBlock = block
+		bc.td = block.Td
+	}
+	return bc
+}
+
+// block processor with fake pow
+func newBlockProcessor(db ethutil.Database, txpool *TxPool, cman *ChainManager, eventMux *event.TypeMux) *BlockProcessor {
+	bman := NewBlockProcessor(db, FakePow{}, txpool, newChainManager(nil, eventMux, db), eventMux)
+	return bman
+}
+
+// Make a new, deterministic canonical chain by running InsertChain
+// on result of makeChain
+func newCanonical(n int, db ethutil.Database) (*BlockProcessor, error) {
+	eventMux := &event.TypeMux{}
+	txpool := NewTxPool(eventMux)
+
+	bman := newBlockProcessor(db, txpool, newChainManager(nil, eventMux, db), eventMux)
+	bman.bc.SetProcessor(bman)
+	parent := bman.bc.CurrentBlock()
+	if n == 0 {
+		return bman, nil
+	}
+	lchain := makeChain(bman, parent, n, db, CanonicalSeed)
+	err := bman.bc.InsertChain(lchain)
+	return bman, err
+}
diff --git a/core/chain_manager.go b/core/chain_manager.go
index 959bfd398..9dc41f421 100644
--- a/core/chain_manager.go
+++ b/core/chain_manager.go
@@ -14,25 +14,28 @@ import (
 	"github.com/ethereum/go-ethereum/state"
 )
 
-var chainlogger = logger.NewLogger("CHAIN")
-
-type ChainEvent struct {
-	Block *types.Block
-	Td    *big.Int
-}
+var (
+	chainlogger = logger.NewLogger("CHAIN")
+	jsonlogger  = logger.NewJsonLogger()
+)
 
 type StateQuery interface {
 	GetAccount(addr []byte) *state.StateObject
 }
 
-func CalcDifficulty(block, parent *types.Block) *big.Int {
+func CalcDifficulty(block, parent *types.Header) *big.Int {
 	diff := new(big.Int)
 
-	adjust := new(big.Int).Rsh(parent.Difficulty(), 10)
-	if block.Time() >= parent.Time()+8 {
-		diff.Sub(parent.Difficulty(), adjust)
+	min := big.NewInt(2048)
+	adjust := new(big.Int).Div(parent.Difficulty, min)
+	if (block.Time - parent.Time) < 8 {
+		diff.Add(parent.Difficulty, adjust)
 	} else {
-		diff.Add(parent.Difficulty(), adjust)
+		diff.Sub(parent.Difficulty, adjust)
+	}
+
+	if diff.Cmp(GenesisDiff) < 0 {
+		return GenesisDiff
 	}
 
 	return diff
@@ -58,7 +61,6 @@ func CalcGasLimit(parent, block *types.Block) *big.Int {
 	}
 
 	// ((1024-1) * parent.gasLimit + (gasUsed * 6 / 5)) / 1024
-
 	previous := new(big.Int).Mul(big.NewInt(1024-1), parent.GasLimit())
 	current := new(big.Rat).Mul(new(big.Rat).SetInt(parent.GasUsed()), big.NewRat(6, 5))
 	curInt := new(big.Int).Div(current.Num(), current.Denom())
@@ -73,7 +75,8 @@ func CalcGasLimit(parent, block *types.Block) *big.Int {
 
 type ChainManager struct {
 	//eth          EthManager
-	db           ethutil.Database
+	blockDb      ethutil.Database
+	stateDb      ethutil.Database
 	processor    types.BlockProcessor
 	eventMux     *event.TypeMux
 	genesisBlock *types.Block
@@ -86,13 +89,16 @@ type ChainManager struct {
 
 	transState *state.StateDB
 	txState    *state.StateDB
+
+	quit chan struct{}
 }
 
-func NewChainManager(db ethutil.Database, mux *event.TypeMux) *ChainManager {
-	bc := &ChainManager{db: db, genesisBlock: GenesisBlock(db), eventMux: mux}
+func NewChainManager(blockDb, stateDb ethutil.Database, mux *event.TypeMux) *ChainManager {
+	bc := &ChainManager{blockDb: blockDb, stateDb: stateDb, genesisBlock: GenesisBlock(stateDb), eventMux: mux, quit: make(chan struct{})}
 	bc.setLastBlock()
 	bc.transState = bc.State().Copy()
 	bc.txState = bc.State().Copy()
+	go bc.update()
 
 	return bc
 }
@@ -122,7 +128,7 @@ func (self *ChainManager) Status() (td *big.Int, currentBlock []byte, genesisBlo
 	self.mu.RLock()
 	defer self.mu.RUnlock()
 
-	return self.td, self.currentBlock.Hash(), self.Genesis().Hash()
+	return self.td, self.currentBlock.Hash(), self.genesisBlock.Hash()
 }
 
 func (self *ChainManager) SetProcessor(proc types.BlockProcessor) {
@@ -130,7 +136,7 @@ func (self *ChainManager) SetProcessor(proc types.BlockProcessor) {
 }
 
 func (self *ChainManager) State() *state.StateDB {
-	return state.New(self.CurrentBlock().Root(), self.db)
+	return state.New(self.CurrentBlock().Root(), self.stateDb)
 }
 
 func (self *ChainManager) TransState() *state.StateDB {
@@ -158,7 +164,7 @@ func (self *ChainManager) setTransState(statedb *state.StateDB) {
 }
 
 func (bc *ChainManager) setLastBlock() {
-	data, _ := bc.db.Get([]byte("LastBlock"))
+	data, _ := bc.blockDb.Get([]byte("LastBlock"))
 	if len(data) != 0 {
 		var block types.Block
 		rlp.Decode(bytes.NewReader(data), &block)
@@ -166,7 +172,7 @@ func (bc *ChainManager) setLastBlock() {
 		bc.lastBlockHash = block.Hash()
 
 		// Set the last know difficulty (might be 0x0 as initial value, Genesis)
-		bc.td = ethutil.BigD(bc.db.LastKnownTD())
+		bc.td = ethutil.BigD(bc.blockDb.LastKnownTD())
 	} else {
 		bc.Reset()
 	}
@@ -192,7 +198,7 @@ func (bc *ChainManager) NewBlock(coinbase []byte) *types.Block {
 		coinbase,
 		root,
 		ethutil.BigPow(2, 32),
-		nil,
+		0,
 		"")
 	block.SetUncles(nil)
 	block.SetTransactions(nil)
@@ -201,7 +207,7 @@ func (bc *ChainManager) NewBlock(coinbase []byte) *types.Block {
 	parent := bc.currentBlock
 	if parent != nil {
 		header := block.Header()
-		header.Difficulty = CalcDifficulty(block, parent)
+		header.Difficulty = CalcDifficulty(block.Header(), parent.Header())
 		header.Number = new(big.Int).Add(parent.Header().Number, ethutil.Big1)
 		header.GasLimit = CalcGasLimit(parent, block)
 
@@ -215,7 +221,7 @@ func (bc *ChainManager) Reset() {
 	defer bc.mu.Unlock()
 
 	for block := bc.currentBlock; block != nil; block = bc.GetBlock(block.Header().ParentHash) {
-		bc.db.Delete(block.Hash())
+		bc.blockDb.Delete(block.Hash())
 	}
 
 	// Prepare the genesis block
@@ -226,6 +232,21 @@ func (bc *ChainManager) Reset() {
 	bc.setTotalDifficulty(ethutil.Big("0"))
 }
 
+func (bc *ChainManager) ResetWithGenesisBlock(gb *types.Block) {
+	bc.mu.Lock()
+	defer bc.mu.Unlock()
+
+	for block := bc.currentBlock; block != nil; block = bc.GetBlock(block.Header().ParentHash) {
+		bc.blockDb.Delete(block.Hash())
+	}
+
+	// Prepare the genesis block
+	bc.genesisBlock = gb
+	bc.write(bc.genesisBlock)
+	bc.insert(bc.genesisBlock)
+	bc.currentBlock = bc.genesisBlock
+}
+
 func (self *ChainManager) Export() []byte {
 	self.mu.RLock()
 	defer self.mu.RUnlock()
@@ -242,14 +263,14 @@ func (self *ChainManager) Export() []byte {
 
 func (bc *ChainManager) insert(block *types.Block) {
 	encodedBlock := ethutil.Encode(block)
-	bc.db.Put([]byte("LastBlock"), encodedBlock)
+	bc.blockDb.Put([]byte("LastBlock"), encodedBlock)
 	bc.currentBlock = block
 	bc.lastBlockHash = block.Hash()
 }
 
 func (bc *ChainManager) write(block *types.Block) {
 	encodedBlock := ethutil.Encode(block.RlpDataForStorage())
-	bc.db.Put(block.Hash(), encodedBlock)
+	bc.blockDb.Put(block.Hash(), encodedBlock)
 }
 
 // Accessors
@@ -259,7 +280,7 @@ func (bc *ChainManager) Genesis() *types.Block {
 
 // Block fetching methods
 func (bc *ChainManager) HasBlock(hash []byte) bool {
-	data, _ := bc.db.Get(hash)
+	data, _ := bc.blockDb.Get(hash)
 	return len(data) != 0
 }
 
@@ -268,7 +289,6 @@ func (self *ChainManager) GetBlockHashesFromHash(hash []byte, max uint64) (chain
 	if block == nil {
 		return
 	}
-
 	// XXX Could be optimised by using a different database which only holds hashes (i.e., linked list)
 	for i := uint64(0); i < max; i++ {
 		parentHash := block.Header().ParentHash
@@ -288,7 +308,7 @@ func (self *ChainManager) GetBlockHashesFromHash(hash []byte, max uint64) (chain
 }
 
 func (self *ChainManager) GetBlock(hash []byte) *types.Block {
-	data, _ := self.db.Get(hash)
+	data, _ := self.blockDb.Get(hash)
 	if len(data) == 0 {
 		return nil
 	}
@@ -342,7 +362,7 @@ func (self *ChainManager) GetBlockByNumber(num uint64) *types.Block {
 }
 
 func (bc *ChainManager) setTotalDifficulty(td *big.Int) {
-	bc.db.Put([]byte("LTD"), td.Bytes())
+	bc.blockDb.Put([]byte("LTD"), td.Bytes())
 	bc.td = td
 }
 
@@ -367,16 +387,24 @@ func (self *ChainManager) CalcTotalDiff(block *types.Block) (*big.Int, error) {
 }
 
 func (bc *ChainManager) Stop() {
-	if bc.CurrentBlock != nil {
-		chainlogger.Infoln("Stopped")
-	}
+	close(bc.quit)
+}
+
+type queueEvent struct {
+	queue          []interface{}
+	canonicalCount int
+	sideCount      int
+	splitCount     int
 }
 
 func (self *ChainManager) InsertChain(chain types.Blocks) error {
-	self.tsmu.Lock()
-	defer self.tsmu.Unlock()
+	//self.tsmu.Lock()
+	//defer self.tsmu.Unlock()
 
-	for _, block := range chain {
+	// A queued approach to delivering events. This is generally faster than direct delivery and requires much less mutex acquiring.
+	var queue = make([]interface{}, len(chain))
+	var queueEvent = queueEvent{queue: queue}
+	for i, block := range chain {
 		// Call in to the block processor and check for errors. It's likely that if one block fails
 		// all others will fail too (unless a known block is returned).
 		td, err := self.processor.Process(block)
@@ -393,43 +421,84 @@ func (self *ChainManager) InsertChain(chain types.Blocks) error {
 		}
 		block.Td = td
 
-		var canonical, split bool
 		self.mu.Lock()
+		cblock := self.currentBlock
 		{
 			// Write block to database. Eventually we'll have to improve on this and throw away blocks that are
 			// not in the canonical chain.
 			self.write(block)
-			cblock := self.currentBlock
 			// Compare the TD of the last known block in the canonical chain to make sure it's greater.
 			// At this point it's possible that a different chain (fork) becomes the new canonical chain.
 			if td.Cmp(self.td) > 0 {
 				if block.Header().Number.Cmp(new(big.Int).Add(cblock.Header().Number, ethutil.Big1)) < 0 {
 					chainlogger.Infof("Split detected. New head #%v (%x) TD=%v, was #%v (%x) TD=%v\n", block.Header().Number, block.Hash()[:4], td, cblock.Header().Number, cblock.Hash()[:4], self.td)
-					split = true
+
+					queue[i] = ChainSplitEvent{block}
+					queueEvent.splitCount++
 				}
 
 				self.setTotalDifficulty(td)
 				self.insert(block)
 
-				canonical = true
+				jsonlogger.LogJson(&logger.EthChainNewHead{
+					BlockHash:     ethutil.Bytes2Hex(block.Hash()),
+					BlockNumber:   block.Number(),
+					ChainHeadHash: ethutil.Bytes2Hex(cblock.Hash()),
+					BlockPrevHash: ethutil.Bytes2Hex(block.ParentHash()),
+				})
+
+				self.setTransState(state.New(block.Root(), self.stateDb))
+				queue[i] = ChainEvent{block}
+				queueEvent.canonicalCount++
+			} else {
+				queue[i] = ChainSideEvent{block}
+				queueEvent.sideCount++
 			}
 		}
 		self.mu.Unlock()
 
-		if canonical {
-			self.setTransState(state.New(block.Root(), self.db))
-			self.eventMux.Post(ChainEvent{block, td})
-		}
-
-		if split {
-			self.setTxState(state.New(block.Root(), self.db))
-			self.eventMux.Post(ChainSplitEvent{block})
-		}
 	}
 
+	// XXX put this in a goroutine?
+	go self.eventMux.Post(queueEvent)
+
 	return nil
 }
 
+func (self *ChainManager) update() {
+	events := self.eventMux.Subscribe(queueEvent{})
+
+out:
+	for {
+		select {
+		case ev := <-events.Chan():
+			switch ev := ev.(type) {
+			case queueEvent:
+				for i, event := range ev.queue {
+					switch event := event.(type) {
+					case ChainEvent:
+						// We need some control over the mining operation. Acquiring locks and waiting for the miner to create new block takes too long
+						// and in most cases isn't even necessary.
+						if i == ev.canonicalCount {
+							self.eventMux.Post(ChainHeadEvent{event.Block})
+						}
+					case ChainSplitEvent:
+						// On chain splits we need to reset the transaction state. We can't be sure whether the actual
+						// state of the accounts are still valid.
+						if i == ev.splitCount {
+							self.setTxState(state.New(event.Block.Root(), self.stateDb))
+						}
+					}
+
+					self.eventMux.Post(event)
+				}
+			}
+		case <-self.quit:
+			break out
+		}
+	}
+}
+
 // Satisfy state query interface
 func (self *ChainManager) GetAccount(addr []byte) *state.StateObject {
 	return self.State().GetAccount(addr)
diff --git a/core/chain_manager_test.go b/core/chain_manager_test.go
index bc3a264d1..e78c2e980 100644
--- a/core/chain_manager_test.go
+++ b/core/chain_manager_test.go
@@ -3,6 +3,7 @@ package core
 import (
 	"bytes"
 	"fmt"
+	"math/big"
 	"os"
 	"path"
 	"runtime"
@@ -21,6 +22,75 @@ func init() {
 	ethutil.ReadConfig("/tmp/ethtest", "/tmp/ethtest", "ETH")
 }
 
+// Test fork of length N starting from block i
+func testFork(t *testing.T, bman *BlockProcessor, i, N int, f func(td1, td2 *big.Int)) {
+	// switch databases to process the new chain
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	// copy old chain up to i into new db with deterministic canonical
+	bman2, err := newCanonical(i, db)
+	if err != nil {
+		t.Fatal("could not make new canonical in testFork", err)
+	}
+	// asert the bmans have the same block at i
+	bi1 := bman.bc.GetBlockByNumber(uint64(i)).Hash()
+	bi2 := bman2.bc.GetBlockByNumber(uint64(i)).Hash()
+	if bytes.Compare(bi1, bi2) != 0 {
+		t.Fatal("chains do not have the same hash at height", i)
+	}
+
+	bman2.bc.SetProcessor(bman2)
+
+	// extend the fork
+	parent := bman2.bc.CurrentBlock()
+	chainB := makeChain(bman2, parent, N, db, ForkSeed)
+	err = bman2.bc.InsertChain(chainB)
+	if err != nil {
+		t.Fatal("Insert chain error for fork:", err)
+	}
+
+	tdpre := bman.bc.Td()
+	// Test the fork's blocks on the original chain
+	td, err := testChain(chainB, bman)
+	if err != nil {
+		t.Fatal("expected chainB not to give errors:", err)
+	}
+	// Compare difficulties
+	f(tdpre, td)
+}
+
+func printChain(bc *ChainManager) {
+	for i := bc.CurrentBlock().Number().Uint64(); i > 0; i-- {
+		b := bc.GetBlockByNumber(uint64(i))
+		fmt.Printf("\t%x\n", b.Hash())
+	}
+}
+
+// process blocks against a chain
+func testChain(chainB types.Blocks, bman *BlockProcessor) (*big.Int, error) {
+	td := new(big.Int)
+	for _, block := range chainB {
+		td2, err := bman.bc.processor.Process(block)
+		if err != nil {
+			if IsKnownBlockErr(err) {
+				continue
+			}
+			return nil, err
+		}
+		block.Td = td2
+		td = td2
+
+		bman.bc.mu.Lock()
+		{
+			bman.bc.write(block)
+		}
+		bman.bc.mu.Unlock()
+	}
+	return td, nil
+}
+
 func loadChain(fn string, t *testing.T) (types.Blocks, error) {
 	fh, err := os.OpenFile(path.Join(os.Getenv("GOPATH"), "src", "github.com", "ethereum", "go-ethereum", "_data", fn), os.O_RDONLY, os.ModePerm)
 	if err != nil {
@@ -45,6 +115,130 @@ func insertChain(done chan bool, chainMan *ChainManager, chain types.Blocks, t *
 	done <- true
 }
 
+func TestExtendCanonical(t *testing.T) {
+	CanonicalLength := 5
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	// make first chain starting from genesis
+	bman, err := newCanonical(CanonicalLength, db)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	f := func(td1, td2 *big.Int) {
+		if td2.Cmp(td1) <= 0 {
+			t.Error("expected chainB to have higher difficulty. Got", td2, "expected more than", td1)
+		}
+	}
+	// Start fork from current height (CanonicalLength)
+	testFork(t, bman, CanonicalLength, 1, f)
+	testFork(t, bman, CanonicalLength, 2, f)
+	testFork(t, bman, CanonicalLength, 5, f)
+	testFork(t, bman, CanonicalLength, 10, f)
+}
+
+func TestShorterFork(t *testing.T) {
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	// make first chain starting from genesis
+	bman, err := newCanonical(10, db)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	f := func(td1, td2 *big.Int) {
+		if td2.Cmp(td1) >= 0 {
+			t.Error("expected chainB to have lower difficulty. Got", td2, "expected less than", td1)
+		}
+	}
+	// Sum of numbers must be less than 10
+	// for this to be a shorter fork
+	testFork(t, bman, 0, 3, f)
+	testFork(t, bman, 0, 7, f)
+	testFork(t, bman, 1, 1, f)
+	testFork(t, bman, 1, 7, f)
+	testFork(t, bman, 5, 3, f)
+	testFork(t, bman, 5, 4, f)
+}
+
+func TestLongerFork(t *testing.T) {
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	// make first chain starting from genesis
+	bman, err := newCanonical(10, db)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	f := func(td1, td2 *big.Int) {
+		if td2.Cmp(td1) <= 0 {
+			t.Error("expected chainB to have higher difficulty. Got", td2, "expected more than", td1)
+		}
+	}
+	// Sum of numbers must be greater than 10
+	// for this to be a longer fork
+	testFork(t, bman, 0, 11, f)
+	testFork(t, bman, 0, 15, f)
+	testFork(t, bman, 1, 10, f)
+	testFork(t, bman, 1, 12, f)
+	testFork(t, bman, 5, 6, f)
+	testFork(t, bman, 5, 8, f)
+}
+
+func TestEqualFork(t *testing.T) {
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	bman, err := newCanonical(10, db)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	f := func(td1, td2 *big.Int) {
+		if td2.Cmp(td1) != 0 {
+			t.Error("expected chainB to have equal difficulty. Got", td2, "expected ", td1)
+		}
+	}
+	// Sum of numbers must be equal to 10
+	// for this to be an equal fork
+	testFork(t, bman, 0, 10, f)
+	testFork(t, bman, 1, 9, f)
+	testFork(t, bman, 2, 8, f)
+	testFork(t, bman, 5, 5, f)
+	testFork(t, bman, 6, 4, f)
+	testFork(t, bman, 9, 1, f)
+}
+
+func TestBrokenChain(t *testing.T) {
+	db, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	bman, err := newCanonical(10, db)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	db2, err := ethdb.NewMemDatabase()
+	if err != nil {
+		t.Fatal("Failed to create db:", err)
+	}
+	bman2, err := newCanonical(10, db2)
+	if err != nil {
+		t.Fatal("Could not make new canonical chain:", err)
+	}
+	bman2.bc.SetProcessor(bman2)
+	parent := bman2.bc.CurrentBlock()
+	chainB := makeChain(bman2, parent, 5, db2, ForkSeed)
+	chainB = chainB[1:]
+	_, err = testChain(chainB, bman)
+	if err == nil {
+		t.Error("expected broken chain to return error")
+	}
+}
+
 func TestChainInsertions(t *testing.T) {
 	t.Skip() // travil fails.
 
@@ -63,9 +257,9 @@ func TestChainInsertions(t *testing.T) {
 	}
 
 	var eventMux event.TypeMux
-	chainMan := NewChainManager(db, &eventMux)
+	chainMan := NewChainManager(db, db, &eventMux)
 	txPool := NewTxPool(&eventMux)
-	blockMan := NewBlockProcessor(db, txPool, chainMan, &eventMux)
+	blockMan := NewBlockProcessor(db, nil, txPool, chainMan, &eventMux)
 	chainMan.SetProcessor(blockMan)
 
 	const max = 2
@@ -109,9 +303,9 @@ func TestChainMultipleInsertions(t *testing.T) {
 		}
 	}
 	var eventMux event.TypeMux
-	chainMan := NewChainManager(db, &eventMux)
+	chainMan := NewChainManager(db, db, &eventMux)
 	txPool := NewTxPool(&eventMux)
-	blockMan := NewBlockProcessor(db, txPool, chainMan, &eventMux)
+	blockMan := NewBlockProcessor(db, nil, txPool, chainMan, &eventMux)
 	chainMan.SetProcessor(blockMan)
 	done := make(chan bool, max)
 	for i, chain := range chains {
@@ -138,7 +332,7 @@ func TestGetAncestors(t *testing.T) {
 
 	db, _ := ethdb.NewMemDatabase()
 	var eventMux event.TypeMux
-	chainMan := NewChainManager(db, &eventMux)
+	chainMan := NewChainManager(db, db, &eventMux)
 	chain, err := loadChain("valid1", t)
 	if err != nil {
 		fmt.Println(err)
diff --git a/core/error.go b/core/error.go
index e86bacb2d..04e40646c 100644
--- a/core/error.go
+++ b/core/error.go
@@ -22,7 +22,7 @@ func (err *ParentErr) Error() string {
 }
 
 func ParentError(hash []byte) error {
-	return &ParentErr{Message: fmt.Sprintf("Block's parent unkown %x", hash)}
+	return &ParentErr{Message: fmt.Sprintf("Block's parent unknown %x", hash)}
 }
 
 func IsParentErr(err error) bool {
@@ -87,6 +87,24 @@ func IsNonceErr(err error) bool {
 	return ok
 }
 
+type InvalidTxErr struct {
+	Message string
+}
+
+func (err *InvalidTxErr) Error() string {
+	return err.Message
+}
+
+func InvalidTxError(err error) *InvalidTxErr {
+	return &InvalidTxErr{fmt.Sprintf("%v", err)}
+}
+
+func IsInvalidTxErr(err error) bool {
+	_, ok := err.(*InvalidTxErr)
+
+	return ok
+}
+
 type OutOfGasErr struct {
 	Message string
 }
@@ -128,3 +146,19 @@ func IsKnownBlockErr(e error) bool {
 	_, ok := e.(*KnownBlockError)
 	return ok
 }
+
+type ValueTransferError struct {
+	message string
+}
+
+func ValueTransferErr(str string, v ...interface{}) *ValueTransferError {
+	return &ValueTransferError{fmt.Sprintf(str, v...)}
+}
+
+func (self *ValueTransferError) Error() string {
+	return self.message
+}
+func IsValueTransferErr(e error) bool {
+	_, ok := e.(*ValueTransferError)
+	return ok
+}
diff --git a/core/events.go b/core/events.go
index 4cbbc609c..23678ef60 100644
--- a/core/events.go
+++ b/core/events.go
@@ -16,3 +16,13 @@ type NewMinedBlockEvent struct{ Block *types.Block }
 
 // ChainSplit is posted when a new head is detected
 type ChainSplitEvent struct{ Block *types.Block }
+
+type ChainEvent struct{ Block *types.Block }
+
+type ChainSideEvent struct{ Block *types.Block }
+
+type ChainHeadEvent struct{ Block *types.Block }
+
+// Mining operation events
+type StartMining struct{}
+type TopMining struct{}
diff --git a/core/execution.go b/core/execution.go
index 5e0cbd37e..4a69cce09 100644
--- a/core/execution.go
+++ b/core/execution.go
@@ -1,7 +1,6 @@
 package core
 
 import (
-	"fmt"
 	"math/big"
 	"time"
 
@@ -26,7 +25,10 @@ func (self *Execution) Addr() []byte {
 
 func (self *Execution) Call(codeAddr []byte, caller vm.ContextRef) ([]byte, error) {
 	// Retrieve the executing code
-	code := self.env.State().GetCode(codeAddr)
+	var code []byte
+	if self.env.State().GetStateObject(codeAddr) != nil {
+		code = self.env.State().GetCode(codeAddr)
+	}
 
 	return self.exec(code, codeAddr, caller)
 }
@@ -55,16 +57,16 @@ func (self *Execution) exec(code, contextAddr []byte, caller vm.ContextRef) (ret
 
 		caller.ReturnGas(self.Gas, self.price)
 
-		return nil, fmt.Errorf("insufficient funds to transfer value. Req %v, has %v", self.value, from.Balance())
+		return nil, ValueTransferErr("insufficient funds to transfer value. Req %v, has %v", self.value, from.Balance())
 	}
 
 	snapshot := env.State().Copy()
 	start := time.Now()
 	ret, err = evm.Run(to, caller, code, self.value, self.Gas, self.price, self.input)
+	chainlogger.Debugf("vm took %v\n", time.Since(start))
 	if err != nil {
 		env.State().Set(snapshot)
 	}
-	chainlogger.Debugf("vm took %v\n", time.Since(start))
 
 	return
 }
diff --git a/core/filter.go b/core/filter.go
index cdf7b282d..d58aa8d7c 100644
--- a/core/filter.go
+++ b/core/filter.go
@@ -17,7 +17,7 @@ type FilterOptions struct {
 	Latest   int64
 
 	Address [][]byte
-	Topics  [][]byte
+	Topics  [][][]byte
 
 	Skip int
 	Max  int
@@ -31,7 +31,7 @@ type Filter struct {
 	skip     int
 	address  [][]byte
 	max      int
-	topics   [][]byte
+	topics   [][][]byte
 
 	BlockCallback   func(*types.Block)
 	PendingCallback func(*types.Block)
@@ -44,6 +44,8 @@ func NewFilter(eth Backend) *Filter {
 	return &Filter{eth: eth}
 }
 
+// SetOptions copies the filter options to the filter it self. The reason for this "silly" copy
+// is simply because named arguments in this case is extremely nice and readable.
 func (self *Filter) SetOptions(options FilterOptions) {
 	self.earliest = options.Earliest
 	self.latest = options.Latest
@@ -69,7 +71,7 @@ func (self *Filter) SetAddress(addr [][]byte) {
 	self.address = addr
 }
 
-func (self *Filter) SetTopics(topics [][]byte) {
+func (self *Filter) SetTopics(topics [][][]byte) {
 	self.topics = topics
 }
 
@@ -145,14 +147,22 @@ func (self *Filter) FilterLogs(logs state.Logs) state.Logs {
 	// Filter the logs for interesting stuff
 Logs:
 	for _, log := range logs {
-		if !includes(self.address, log.Address()) {
+		if len(self.address) > 0 && !includes(self.address, log.Address()) {
 			continue
 		}
 
-		max := int(math.Min(float64(len(self.topics)), float64(len(log.Topics()))))
-		for i := 0; i < max; i++ {
-			if !bytes.Equal(log.Topics()[i], self.topics[i]) {
-				continue Logs
+		logTopics := make([][]byte, len(self.topics))
+		copy(logTopics, log.Topics())
+
+		for i, topics := range self.topics {
+			for _, topic := range topics {
+				var match bool
+				if bytes.Equal(log.Topics()[i], topic) {
+					match = true
+				}
+				if !match {
+					continue Logs
+				}
 			}
 		}
 
@@ -177,8 +187,15 @@ func (self *Filter) bloomFilter(block *types.Block) bool {
 		}
 	}
 
-	for _, topic := range self.topics {
-		if !types.BloomLookup(block.Bloom(), topic) {
+	for _, sub := range self.topics {
+		var included bool
+		for _, topic := range sub {
+			if types.BloomLookup(block.Bloom(), topic) {
+				included = true
+				break
+			}
+		}
+		if !included {
 			return false
 		}
 	}
diff --git a/core/genesis.go b/core/genesis.go
index decffc541..a3f5dfb38 100644
--- a/core/genesis.go
+++ b/core/genesis.go
@@ -22,12 +22,17 @@ var ZeroHash512 = make([]byte, 64)
 var EmptyShaList = crypto.Sha3(ethutil.Encode([]interface{}{}))
 var EmptyListRoot = crypto.Sha3(ethutil.Encode(""))
 
+var GenesisDiff = big.NewInt(131072)
+
 func GenesisBlock(db ethutil.Database) *types.Block {
-	genesis := types.NewBlock(ZeroHash256, ZeroHash160, nil, big.NewInt(131072), crypto.Sha3(big.NewInt(42).Bytes()), "")
+	genesis := types.NewBlock(ZeroHash256, ZeroHash160, nil, GenesisDiff, 42, "")
 	genesis.Header().Number = ethutil.Big0
 	genesis.Header().GasLimit = big.NewInt(1000000)
 	genesis.Header().GasUsed = ethutil.Big0
 	genesis.Header().Time = 0
+	genesis.Header().SeedHash = make([]byte, 32)
+	genesis.Header().MixDigest = make([]byte, 32)
+
 	genesis.Td = ethutil.Big0
 
 	genesis.SetUncles([]*types.Header{})
@@ -55,6 +60,10 @@ func GenesisBlock(db ethutil.Database) *types.Block {
 }
 
 var genesisData = []byte(`{
+	"0000000000000000000000000000000000000001": {"balance": "1"},
+	"0000000000000000000000000000000000000002": {"balance": "1"},
+	"0000000000000000000000000000000000000003": {"balance": "1"},
+	"0000000000000000000000000000000000000004": {"balance": "1"},
 	"dbdbdb2cbd23b783741e8d7fcf51e459b497e4a6": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
 	"e4157b34ea9615cfbde6b4fda419828124b70c78": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
 	"b9c015918bdaba24b4ff057a92a3873d6eb201be": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
@@ -62,9 +71,5 @@ var genesisData = []byte(`{
 	"cd2a3d9f938e13cd947ec05abc7fe734df8dd826": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
 	"2ef47100e0787b915105fd5e3f4ff6752079d5cb": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
 	"e6716f9544a56c530d868e4bfbacb172315bdead": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
-	"1a26338f0d905e295fccb71fa9ea849ffa12aaf4": {"balance": "1606938044258990275541962092341162602522202993782792835301376"},
-	"b0afc46d9ce366d06ab4952ca27db1d9557ae9fd": {"balance": "154162184000000000000000"},
-	"f6b1e9dc460d4d62cc22ec5f987d726929c0f9f0": {"balance": "102774789000000000000000"},
-	"cc45122d8b7fa0b1eaa6b29e0fb561422a9239d0": {"balance": "51387394000000000000000"},
-	"b7576e9d314df41ec5506494293afb1bd5d3f65d": {"balance": "69423399000000000000000"}
+	"1a26338f0d905e295fccb71fa9ea849ffa12aaf4": {"balance": "1606938044258990275541962092341162602522202993782792835301376"}
 }`)
diff --git a/core/manager.go b/core/manager.go
index bb039d063..803069377 100644
--- a/core/manager.go
+++ b/core/manager.go
@@ -15,6 +15,7 @@ type Backend interface {
 	IsListening() bool
 	Peers() []*p2p.Peer
 	KeyManager() *crypto.KeyManager
-	Db() ethutil.Database
+	BlockDb() ethutil.Database
+	StateDb() ethutil.Database
 	EventMux() *event.TypeMux
 }
diff --git a/core/state_transition.go b/core/state_transition.go
index 7331fdd4a..f54acd6ee 100644
--- a/core/state_transition.go
+++ b/core/state_transition.go
@@ -12,6 +12,8 @@ import (
 
 const tryJit = false
 
+var ()
+
 /*
  * The State transitioning model
  *
@@ -144,7 +146,7 @@ func (self *StateTransition) preCheck() (err error) {
 
 	// Pre-pay gas / Buy gas of the coinbase account
 	if err = self.BuyGas(); err != nil {
-		return err
+		return InvalidTxError(err)
 	}
 
 	return nil
@@ -165,26 +167,26 @@ func (self *StateTransition) TransitionState() (ret []byte, err error) {
 
 	defer self.RefundGas()
 
-	// Increment the nonce for the next transaction
-	self.state.SetNonce(sender.Address(), sender.Nonce()+1)
-	//sender.Nonce += 1
-
 	// Transaction gas
 	if err = self.UseGas(vm.GasTx); err != nil {
-		return
+		return nil, InvalidTxError(err)
 	}
 
+	// Increment the nonce for the next transaction
+	self.state.SetNonce(sender.Address(), sender.Nonce()+1)
+	//sender.Nonce += 1
+
 	// Pay data gas
 	var dgas int64
 	for _, byt := range self.data {
 		if byt != 0 {
-			dgas += vm.GasData.Int64()
+			dgas += vm.GasTxDataNonzeroByte.Int64()
 		} else {
-			dgas += 1 // This is 1/5. If GasData changes this fails
+			dgas += vm.GasTxDataZeroByte.Int64()
 		}
 	}
 	if err = self.UseGas(big.NewInt(dgas)); err != nil {
-		return
+		return nil, InvalidTxError(err)
 	}
 
 	//stateCopy := self.env.State().Copy()
@@ -230,10 +232,16 @@ func (self *StateTransition) TransitionState() (ret []byte, err error) {
 		*/
 	}
 
-	if err != nil {
-		self.UseGas(self.gas)
+	if err != nil && IsValueTransferErr(err) {
+		return nil, InvalidTxError(err)
 	}
 
+	/*
+		if err != nil {
+			self.UseGas(self.gas)
+		}
+	*/
+
 	return
 }
 
diff --git a/core/transaction_pool.go b/core/transaction_pool.go
index 050cff3d8..bd377f679 100644
--- a/core/transaction_pool.go
+++ b/core/transaction_pool.go
@@ -117,8 +117,13 @@ func (self *TxPool) add(tx *types.Transaction) error {
 	} else {
 		to = "[NEW_CONTRACT]"
 	}
-
-	txplogger.Debugf("(t) %x => %s (%v) %x\n", tx.From()[:4], to, tx.Value, tx.Hash())
+	var from string
+	if len(tx.From()) > 0 {
+		from = ethutil.Bytes2Hex(tx.From()[:4])
+	} else {
+		return errors.New(fmt.Sprintf("FROM ADDRESS MUST BE POSITIVE (was %v)", tx.From()))
+	}
+	txplogger.Debugf("(t) %x => %s (%v) %x\n", from, to, tx.Value, tx.Hash())
 
 	// Notify the subscribers
 	go self.eventMux.Post(TxPreEvent{tx})
diff --git a/core/types/block.go b/core/types/block.go
index d57de1311..31c7c2b87 100644
--- a/core/types/block.go
+++ b/core/types/block.go
@@ -2,6 +2,7 @@ package types
 
 import (
 	"bytes"
+	"encoding/binary"
 	"fmt"
 	"math/big"
 	"sort"
@@ -39,14 +40,33 @@ type Header struct {
 	Time uint64
 	// Extra data
 	Extra string
-	// Block Nonce for verification
-	Nonce ethutil.Bytes
+	// SeedHash used for light client verification
+	SeedHash ethutil.Bytes
+	// Mix digest for quick checking to prevent DOS
+	MixDigest ethutil.Bytes
+	// Nonce
+	Nonce []byte
 }
 
 func (self *Header) rlpData(withNonce bool) []interface{} {
-	fields := []interface{}{self.ParentHash, self.UncleHash, self.Coinbase, self.Root, self.TxHash, self.ReceiptHash, self.Bloom, self.Difficulty, self.Number, self.GasLimit, self.GasUsed, self.Time, self.Extra}
+	fields := []interface{}{
+		self.ParentHash,
+		self.UncleHash,
+		self.Coinbase,
+		self.Root,
+		self.TxHash,
+		self.ReceiptHash,
+		self.Bloom,
+		self.Difficulty,
+		self.Number,
+		self.GasLimit,
+		self.GasUsed,
+		self.Time,
+		self.Extra,
+		self.SeedHash,
+	}
 	if withNonce {
-		fields = append(fields, self.Nonce)
+		fields = append(fields, self.MixDigest, self.Nonce)
 	}
 
 	return fields
@@ -77,24 +97,29 @@ type Block struct {
 	Reward   *big.Int
 }
 
-func NewBlock(parentHash []byte, coinbase []byte, root []byte, difficulty *big.Int, nonce []byte, extra string) *Block {
+func NewBlock(parentHash []byte, coinbase []byte, root []byte, difficulty *big.Int, nonce uint64, extra string) *Block {
 	header := &Header{
 		Root:       root,
 		ParentHash: parentHash,
 		Coinbase:   coinbase,
 		Difficulty: difficulty,
-		Nonce:      nonce,
 		Time:       uint64(time.Now().Unix()),
 		Extra:      extra,
 		GasUsed:    new(big.Int),
 		GasLimit:   new(big.Int),
 	}
+	header.setNonce(nonce)
 
 	block := &Block{header: header, Reward: new(big.Int)}
 
 	return block
 }
 
+func (self *Header) setNonce(nonce uint64) {
+	self.Nonce = make([]byte, 8)
+	binary.BigEndian.PutUint64(self.Nonce, nonce)
+}
+
 func NewBlockWithHeader(header *Header) *Block {
 	return &Block{header: header}
 }
@@ -174,9 +199,17 @@ func (self *Block) RlpDataForStorage() interface{} {
 }
 
 // Header accessors (add as you need them)
-func (self *Block) Number() *big.Int          { return self.header.Number }
-func (self *Block) NumberU64() uint64         { return self.header.Number.Uint64() }
-func (self *Block) Nonce() []byte             { return self.header.Nonce }
+func (self *Block) Number() *big.Int  { return self.header.Number }
+func (self *Block) NumberU64() uint64 { return self.header.Number.Uint64() }
+func (self *Block) MixDigest() []byte { return self.header.MixDigest }
+func (self *Block) SeedHash() []byte  { return self.header.SeedHash }
+func (self *Block) Nonce() uint64 {
+	return binary.BigEndian.Uint64(self.header.Nonce)
+}
+func (self *Block) SetNonce(nonce uint64) {
+	self.header.setNonce(nonce)
+}
+
 func (self *Block) Bloom() []byte             { return self.header.Bloom }
 func (self *Block) Coinbase() []byte          { return self.header.Coinbase }
 func (self *Block) Time() int64               { return int64(self.header.Time) }
@@ -200,7 +233,6 @@ func (self *Block) GetUncle(i int) *Header {
 
 // Implement pow.Block
 func (self *Block) Difficulty() *big.Int { return self.header.Difficulty }
-func (self *Block) N() []byte            { return self.header.Nonce }
 func (self *Block) HashNoNonce() []byte  { return self.header.HashNoNonce() }
 
 func (self *Block) Hash() []byte {
@@ -249,8 +281,10 @@ func (self *Header) String() string {
 	GasUsed:	    %v
 	Time:		    %v
 	Extra:		    %v
-	Nonce:		    %x
-`, self.ParentHash, self.UncleHash, self.Coinbase, self.Root, self.TxHash, self.ReceiptHash, self.Bloom, self.Difficulty, self.Number, self.GasLimit, self.GasUsed, self.Time, self.Extra, self.Nonce)
+	SeedHash:           %x
+	MixDigest:          %x
+	Nonce:		    %x`,
+		self.ParentHash, self.UncleHash, self.Coinbase, self.Root, self.TxHash, self.ReceiptHash, self.Bloom, self.Difficulty, self.Number, self.GasLimit, self.GasUsed, self.Time, self.Extra, self.SeedHash, self.MixDigest, self.Nonce)
 }
 
 type Blocks []*Block
diff --git a/core/types/bloom9.go b/core/types/bloom9.go
index c1841e553..578265a34 100644
--- a/core/types/bloom9.go
+++ b/core/types/bloom9.go
@@ -14,7 +14,7 @@ func CreateBloom(receipts Receipts) []byte {
 		bin.Or(bin, LogsBloom(receipt.logs))
 	}
 
-	return ethutil.LeftPadBytes(bin.Bytes(), 64)
+	return ethutil.LeftPadBytes(bin.Bytes(), 256)
 }
 
 func LogsBloom(logs state.Logs) *big.Int {
@@ -37,9 +37,10 @@ func LogsBloom(logs state.Logs) *big.Int {
 
 func bloom9(b []byte) *big.Int {
 	r := new(big.Int)
-	for _, i := range []int{0, 2, 4} {
+
+	for i := 0; i < 16; i += 2 {
 		t := big.NewInt(1)
-		b := uint(b[i+1]) + 256*(uint(b[i])&1)
+		b := uint(b[i+1]) + 1024*(uint(b[i])&1)
 		r.Or(r, t.Lsh(t, b))
 	}