diff --git a/pkg/chain/chain.go b/pkg/chain/chain.go
new file mode 100644
index 000000000..c1492cb8f
--- /dev/null
+++ b/pkg/chain/chain.go
@@ -0,0 +1,91 @@
+package chain
+
+import (
+	"errors"
+
+	"github.com/CityOfZion/neo-go/pkg/wire/payload/transaction"
+
+	"github.com/CityOfZion/neo-go/pkg/database"
+	"github.com/CityOfZion/neo-go/pkg/wire/payload"
+)
+
+var (
+	// ErrBlockAlreadyExists happens when you try to save the same block twice
+	ErrBlockAlreadyExists = errors.New("this block has already been saved in the database")
+)
+
+// Chain represents a blockchain instance
+type Chain struct {
+	db *Chaindb
+}
+
+//New returns a new chain instance
+func New(db database.Database) *Chain {
+	return &Chain{
+		db: &Chaindb{db},
+	}
+}
+
+// SaveBlock verifies and saves the block in the database
+// XXX: for now we will just save without verifying the block
+// This function is called by the server and if an error is returned then
+// the server informs the sync manager to redownload the block
+// XXX:We should also check if the header is already saved in the database
+// If not, then we need to validate the header with the rest of the chain
+// For now we re-save the header
+func (c *Chain) SaveBlock(msg payload.BlockMessage) error {
+	err := c.VerifyBlock(msg.Block)
+	if err != nil {
+		return err
+	}
+	//XXX(Issue): We can either check the hash here for genesisblock.
+	//We most likely will have it anyways after validation/ We can return it from VerifyBlock
+	// Or we can do it somewhere in startup, performance benefits
+	// won't be that big since it's just a bytes.Equal.
+	// so it's more about which is more readable and where it makes sense to put
+	return c.db.saveBlock(msg.Block, false)
+}
+
+// VerifyBlock verifies whether a block is valid according
+// to the rules of consensus
+func (c *Chain) VerifyBlock(block payload.Block) error {
+
+	// Check if we already have this block
+	// XXX: We can optimise by implementing a Has method
+	// caching the last block in memory
+	lastBlock, err := c.db.GetLastBlock()
+	if err != nil {
+		return err
+	}
+	// Check if we have already saved this block
+	// by looking if the latest block height is more than
+	// incoming block height
+	if lastBlock.Index > block.Index {
+		return ErrBlockAlreadyExists
+	}
+
+	return nil
+}
+
+// VerifyTx verifies whether a transaction is valid according
+// to the rules of consensus
+func (c *Chain) VerifyTx(tx transaction.Transactioner) error {
+	return nil
+}
+
+// SaveHeaders will save the set of headers without validating
+func (c *Chain) SaveHeaders(msg payload.HeadersMessage) error {
+
+	err := c.verifyHeaders(msg.Headers)
+	if err != nil {
+		return err
+	}
+	return c.db.saveHeaders(msg.Headers)
+}
+
+// verifyHeaders will be used to verify a batch of headers
+// should only ever be called during the initial block download
+// or when the node receives a HeadersMessage
+func (c *Chain) verifyHeaders(hdrs []*payload.BlockBase) error {
+	return nil
+}