diff --git a/go.mod b/go.mod
index 5aa463fdb..6f1e947d8 100644
--- a/go.mod
+++ b/go.mod
@@ -1,6 +1,7 @@
 module github.com/CityOfZion/neo-go
 
 require (
+	github.com/Workiva/go-datastructures v1.0.50
 	github.com/abiosoft/ishell v2.0.0+incompatible // indirect
 	github.com/abiosoft/readline v0.0.0-20180607040430-155bce2042db // indirect
 	github.com/alicebob/gopher-json v0.0.0-20180125190556-5a6b3ba71ee6 // indirect
diff --git a/go.sum b/go.sum
index 4ba89b8ea..3ec2e92ef 100644
--- a/go.sum
+++ b/go.sum
@@ -1,3 +1,5 @@
+github.com/Workiva/go-datastructures v1.0.50 h1:slDmfW6KCHcC7U+LP3DDBbm4fqTwZGn1beOFPfGaLvo=
+github.com/Workiva/go-datastructures v1.0.50/go.mod h1:Z+F2Rca0qCsVYDS8z7bAGm8f3UkzuWYS/oBZz5a7VVA=
 github.com/abiosoft/ishell v2.0.0+incompatible h1:zpwIuEHc37EzrsIYah3cpevrIc8Oma7oZPxr03tlmmw=
 github.com/abiosoft/ishell v2.0.0+incompatible/go.mod h1:HQR9AqF2R3P4XXpMpI0NAzgHf/aS6+zVXRj14cVk9qg=
 github.com/abiosoft/readline v0.0.0-20180607040430-155bce2042db h1:CjPUSXOiYptLbTdr1RceuZgSFDQ7U15ITERUGrUORx8=
diff --git a/pkg/core/account_state.go b/pkg/core/account_state.go
index 87c9771a0..ae34d573a 100644
--- a/pkg/core/account_state.go
+++ b/pkg/core/account_state.go
@@ -12,25 +12,46 @@ import (
 // Accounts is mapping between a account address and AccountState.
 type Accounts map[util.Uint160]*AccountState
 
-func (a Accounts) getAndUpdate(s storage.Store, hash util.Uint160) (*AccountState, error) {
+// getAndUpdate retrieves AccountState from temporary or persistent Store
+// or creates a new one if it doesn't exist.
+func (a Accounts) getAndUpdate(ts storage.Store, ps storage.Store, hash util.Uint160) (*AccountState, error) {
 	if account, ok := a[hash]; ok {
 		return account, nil
 	}
 
-	account := &AccountState{}
+	account, err := getAccountStateFromStore(ts, hash)
+	if err != nil {
+		if err != storage.ErrKeyNotFound {
+			return nil, err
+		}
+		account, err = getAccountStateFromStore(ps, hash)
+		if err != nil {
+			if err != storage.ErrKeyNotFound {
+				return nil, err
+			}
+			account = NewAccountState(hash)
+		}
+	}
+
+	a[hash] = account
+	return account, nil
+}
+
+// getAccountStateFromStore returns AccountState from the given Store if it's
+// present there. Returns nil otherwise.
+func getAccountStateFromStore(s storage.Store, hash util.Uint160) (*AccountState, error) {
+	var account *AccountState
 	key := storage.AppendPrefix(storage.STAccount, hash.Bytes())
-	if b, err := s.Get(key); err == nil {
+	b, err := s.Get(key)
+	if err == nil {
+		account = new(AccountState)
 		r := io.NewBinReaderFromBuf(b)
 		account.DecodeBinary(r)
 		if r.Err != nil {
 			return nil, fmt.Errorf("failed to decode (AccountState): %s", r.Err)
 		}
-	} else {
-		account = NewAccountState(hash)
 	}
-
-	a[hash] = account
-	return account, nil
+	return account, err
 }
 
 // commit writes all account states to the given Batch.
diff --git a/pkg/core/block.go b/pkg/core/block.go
index 27ec6b225..97fdeabce 100644
--- a/pkg/core/block.go
+++ b/pkg/core/block.go
@@ -5,6 +5,7 @@ import (
 	"github.com/CityOfZion/neo-go/pkg/crypto"
 	"github.com/CityOfZion/neo-go/pkg/io"
 	"github.com/CityOfZion/neo-go/pkg/util"
+	"github.com/Workiva/go-datastructures/queue"
 	log "github.com/sirupsen/logrus"
 )
 
@@ -132,3 +133,16 @@ func (b *Block) EncodeBinary(bw *io.BinWriter) {
 		tx.EncodeBinary(bw)
 	}
 }
+
+// Compare implements the queue Item interface.
+func (b *Block) Compare(item queue.Item) int {
+	other := item.(*Block)
+	switch {
+	case b.Index > other.Index:
+		return 1
+	case b.Index == other.Index:
+		return 0
+	default:
+		return -1
+	}
+}
diff --git a/pkg/core/block_test.go b/pkg/core/block_test.go
index a26007d7e..164a0ab88 100644
--- a/pkg/core/block_test.go
+++ b/pkg/core/block_test.go
@@ -259,3 +259,12 @@ func TestBlockSizeCalculation(t *testing.T) {
 	assert.Equal(t, 7360, len(benc))
 	assert.Equal(t, rawBlock, hex.EncodeToString(benc))
 }
+
+func TestBlockCompare(t *testing.T) {
+	b1 := Block{BlockBase: BlockBase{Index: 1}}
+	b2 := Block{BlockBase: BlockBase{Index: 2}}
+	b3 := Block{BlockBase: BlockBase{Index: 3}}
+	assert.Equal(t, 1, b2.Compare(&b1))
+	assert.Equal(t, 0, b2.Compare(&b2))
+	assert.Equal(t, -1, b2.Compare(&b3))
+}
diff --git a/pkg/core/blockchain.go b/pkg/core/blockchain.go
index 24f98ffcb..03e75bedd 100644
--- a/pkg/core/blockchain.go
+++ b/pkg/core/blockchain.go
@@ -37,16 +37,20 @@ type Blockchain struct {
 	// Any object that satisfies the BlockchainStorer interface.
 	storage.Store
 
+	// In-memory storage to be persisted into the storage.Store
+	memStore *storage.MemoryStore
+
 	// Current index/height of the highest block.
 	// Read access should always be called by BlockHeight().
-	// Write access should only happen in Persist().
+	// Write access should only happen in storeBlock().
 	blockHeight uint32
 
+	// Current persisted block count.
+	persistedHeight uint32
+
 	// Number of headers stored in the chain file.
 	storedHeaderCount uint32
 
-	blockCache *Cache
-
 	// All operation on headerList must be called from an
 	// headersOp to be routine safe.
 	headerList *HeaderHashList
@@ -69,9 +73,9 @@ func NewBlockchain(s storage.Store, cfg config.ProtocolConfiguration) (*Blockcha
 	bc := &Blockchain{
 		config:        cfg,
 		Store:         s,
+		memStore:      storage.NewMemoryStore(),
 		headersOp:     make(chan headersOpFunc),
 		headersOpDone: make(chan struct{}),
-		blockCache:    NewCache(),
 		verifyBlocks:  false,
 		memPool:       NewMemPool(50000),
 	}
@@ -96,7 +100,7 @@ func (bc *Blockchain) init() error {
 			return err
 		}
 		bc.headerList = NewHeaderHashList(genesisBlock.Hash())
-		return bc.persistBlock(genesisBlock)
+		return bc.storeBlock(genesisBlock)
 	}
 	if ver != version {
 		return fmt.Errorf("storage version mismatch betweeen %s and %s", version, ver)
@@ -112,6 +116,7 @@ func (bc *Blockchain) init() error {
 		return err
 	}
 	bc.blockHeight = bHeight
+	bc.persistedHeight = bHeight
 
 	hashes, err := storage.HeaderHashes(bc.Store)
 	if err != nil {
@@ -144,8 +149,11 @@ func (bc *Blockchain) init() error {
 		}
 
 		headerSliceReverse(headers)
-		if err := bc.AddHeaders(headers...); err != nil {
-			return err
+		for _, h := range headers {
+			if !h.Verify() {
+				return fmt.Errorf("bad header %d/%s in the storage", h.Index, h.Hash())
+			}
+			bc.headerList.Add(h.Hash())
 		}
 	}
 
@@ -157,6 +165,11 @@ func (bc *Blockchain) Run(ctx context.Context) {
 	persistTimer := time.NewTimer(persistInterval)
 	defer func() {
 		persistTimer.Stop()
+		if err := bc.persist(ctx); err != nil {
+			log.Warnf("failed to persist: %s", err)
+		}
+		// never fails
+		_ = bc.memStore.Close()
 		if err := bc.Store.Close(); err != nil {
 			log.Warnf("failed to close db: %s", err)
 		}
@@ -170,7 +183,7 @@ func (bc *Blockchain) Run(ctx context.Context) {
 			bc.headersOpDone <- struct{}{}
 		case <-persistTimer.C:
 			go func() {
-				err := bc.Persist(ctx)
+				err := bc.persist(ctx)
 				if err != nil {
 					log.Warnf("failed to persist blockchain: %s", err)
 				}
@@ -180,24 +193,24 @@ func (bc *Blockchain) Run(ctx context.Context) {
 	}
 }
 
-// AddBlock processes the given block and will add it to the cache so it
-// can be persisted.
+// AddBlock accepts successive block for the Blockchain, verifies it and
+// stores internally. Eventually it will be persisted to the backing storage.
 func (bc *Blockchain) AddBlock(block *Block) error {
-	if !bc.blockCache.Has(block.Hash()) {
-		bc.blockCache.Add(block.Hash(), block)
+	expectedHeight := bc.BlockHeight() + 1
+	if expectedHeight != block.Index {
+		return fmt.Errorf("expected block %d, but passed block %d", expectedHeight, block.Index)
+	}
+	if bc.verifyBlocks && !block.Verify(false) {
+		return fmt.Errorf("block %s is invalid", block.Hash())
 	}
-
 	headerLen := bc.headerListLen()
-	if int(block.Index-1) >= headerLen {
-		return nil
-	}
 	if int(block.Index) == headerLen {
-		if bc.verifyBlocks && !block.Verify(false) {
-			return fmt.Errorf("block %s is invalid", block.Hash())
+		err := bc.AddHeaders(block.Header())
+		if err != nil {
+			return err
 		}
-		return bc.AddHeaders(block.Header())
 	}
-	return nil
+	return bc.storeBlock(block)
 }
 
 // AddHeaders will process the given headers and add them to the
@@ -205,7 +218,7 @@ func (bc *Blockchain) AddBlock(block *Block) error {
 func (bc *Blockchain) AddHeaders(headers ...*Header) (err error) {
 	var (
 		start = time.Now()
-		batch = bc.Batch()
+		batch = bc.memStore.Batch()
 	)
 
 	bc.headersOp <- func(headerList *HeaderHashList) {
@@ -230,7 +243,7 @@ func (bc *Blockchain) AddHeaders(headers ...*Header) (err error) {
 		}
 
 		if batch.Len() > 0 {
-			if err = bc.PutBatch(batch); err != nil {
+			if err = bc.memStore.PutBatch(batch); err != nil {
 				return
 			}
 			log.WithFields(log.Fields{
@@ -273,13 +286,13 @@ func (bc *Blockchain) processHeader(h *Header, batch storage.Batch, headerList *
 	return nil
 }
 
-// TODO: persistBlock needs some more love, its implemented as in the original
+// TODO: storeBlock needs some more love, its implemented as in the original
 // project. This for the sake of development speed and understanding of what
 // is happening here, quite allot as you can see :). If things are wired together
 // and all tests are in place, we can make a more optimized and cleaner implementation.
-func (bc *Blockchain) persistBlock(block *Block) error {
+func (bc *Blockchain) storeBlock(block *Block) error {
 	var (
-		batch        = bc.Batch()
+		batch        = bc.memStore.Batch()
 		unspentCoins = make(UnspentCoins)
 		spentCoins   = make(SpentCoins)
 		accounts     = make(Accounts)
@@ -301,7 +314,7 @@ func (bc *Blockchain) persistBlock(block *Block) error {
 
 		// Process TX outputs.
 		for _, output := range tx.Outputs {
-			account, err := accounts.getAndUpdate(bc.Store, output.ScriptHash)
+			account, err := accounts.getAndUpdate(bc.memStore, bc.Store, output.ScriptHash)
 			if err != nil {
 				return err
 			}
@@ -319,14 +332,14 @@ func (bc *Blockchain) persistBlock(block *Block) error {
 				return fmt.Errorf("could not find previous TX: %s", prevHash)
 			}
 			for _, input := range inputs {
-				unspent, err := unspentCoins.getAndUpdate(bc.Store, input.PrevHash)
+				unspent, err := unspentCoins.getAndUpdate(bc.memStore, bc.Store, input.PrevHash)
 				if err != nil {
 					return err
 				}
 				unspent.states[input.PrevIndex] = CoinStateSpent
 
 				prevTXOutput := prevTX.Outputs[input.PrevIndex]
-				account, err := accounts.getAndUpdate(bc.Store, prevTXOutput.ScriptHash)
+				account, err := accounts.getAndUpdate(bc.memStore, bc.Store, prevTXOutput.ScriptHash)
 				if err != nil {
 					return err
 				}
@@ -388,7 +401,7 @@ func (bc *Blockchain) persistBlock(block *Block) error {
 	if err := assets.commit(batch); err != nil {
 		return err
 	}
-	if err := bc.PutBatch(batch); err != nil {
+	if err := bc.memStore.PutBatch(batch); err != nil {
 		return err
 	}
 
@@ -396,63 +409,37 @@ func (bc *Blockchain) persistBlock(block *Block) error {
 	return nil
 }
 
-//Persist starts persist loop.
-func (bc *Blockchain) Persist(ctx context.Context) (err error) {
+// persist flushes current in-memory store contents to the persistent storage.
+func (bc *Blockchain) persist(ctx context.Context) error {
 	var (
 		start     = time.Now()
 		persisted = 0
-		lenCache  = bc.blockCache.Len()
+		err       error
 	)
 
-	if lenCache == 0 {
-		return nil
+	persisted, err = bc.memStore.Persist(bc.Store)
+	if err != nil {
+		return err
 	}
-
-	bc.headersOp <- func(headerList *HeaderHashList) {
-		for i := 0; i < lenCache; i++ {
-			if uint32(headerList.Len()) <= bc.BlockHeight() {
-				return
-			}
-			hash := headerList.Get(int(bc.BlockHeight() + 1))
-			if block, ok := bc.blockCache.GetBlock(hash); ok {
-				if err = bc.persistBlock(block); err != nil {
-					return
-				}
-				bc.blockCache.Delete(hash)
-				persisted++
-			} else {
-				// no next block in the cache, no reason to continue looping
-				break
-			}
-		}
-	}
-
-	select {
-	case <-ctx.Done():
-		return
-	case <-bc.headersOpDone:
-		//
+	bHeight, err := storage.CurrentBlockHeight(bc.Store)
+	if err != nil {
+		return err
 	}
+	oldHeight := atomic.SwapUint32(&bc.persistedHeight, bHeight)
+	diff := bHeight - oldHeight
 
 	if persisted > 0 {
 		log.WithFields(log.Fields{
-			"persisted":    persisted,
-			"headerHeight": bc.HeaderHeight(),
-			"blockHeight":  bc.BlockHeight(),
-			"took":         time.Since(start),
+			"persistedBlocks": diff,
+			"persistedKeys":   persisted,
+			"headerHeight":    bc.HeaderHeight(),
+			"blockHeight":     bc.BlockHeight(),
+			"persistedHeight": bc.persistedHeight,
+			"took":            time.Since(start),
 		}).Info("blockchain persist completed")
-	} else {
-		// So we have some blocks in cache but can't persist them?
-		// Either there are some stale blocks there or the other way
-		// around (which was seen in practice) --- there are some fresh
-		// blocks that we can't persist yet. Some of the latter can be useful
-		// or can be bogus (higher than the header height we expect at
-		// the moment). So try to reap oldies and strange newbies, if
-		// there are any.
-		bc.blockCache.ReapStrangeBlocks(bc.BlockHeight(), bc.HeaderHeight())
 	}
 
-	return
+	return nil
 }
 
 func (bc *Blockchain) headerListLen() (n int) {
@@ -468,9 +455,18 @@ func (bc *Blockchain) GetTransaction(hash util.Uint256) (*transaction.Transactio
 	if tx, ok := bc.memPool.TryGetValue(hash); ok {
 		return tx, 0, nil // the height is not actually defined for memPool transaction. Not sure if zero is a good number in this case.
 	}
+	tx, height, err := getTransactionFromStore(bc.memStore, hash)
+	if err != nil {
+		tx, height, err = getTransactionFromStore(bc.Store, hash)
+	}
+	return tx, height, err
+}
 
+// getTransactionFromStore returns Transaction and its height by the given hash
+// if it exists in the store.
+func getTransactionFromStore(s storage.Store, hash util.Uint256) (*transaction.Transaction, uint32, error) {
 	key := storage.AppendPrefix(storage.DataTransaction, hash.BytesReverse())
-	b, err := bc.Get(key)
+	b, err := s.Get(key)
 	if err != nil {
 		return nil, 0, err
 	}
@@ -490,8 +486,23 @@ func (bc *Blockchain) GetTransaction(hash util.Uint256) (*transaction.Transactio
 
 // GetBlock returns a Block by the given hash.
 func (bc *Blockchain) GetBlock(hash util.Uint256) (*Block, error) {
+	block, err := getBlockFromStore(bc.memStore, hash)
+	if err != nil {
+		block, err = getBlockFromStore(bc.Store, hash)
+		if err != nil {
+			return nil, err
+		}
+	}
+	if len(block.Transactions) == 0 {
+		return nil, fmt.Errorf("only header is available")
+	}
+	return block, nil
+}
+
+// getBlockFromStore returns Block by the given hash if it exists in the store.
+func getBlockFromStore(s storage.Store, hash util.Uint256) (*Block, error) {
 	key := storage.AppendPrefix(storage.DataBlock, hash.BytesReverse())
-	b, err := bc.Get(key)
+	b, err := s.Get(key)
 	if err != nil {
 		return nil, err
 	}
@@ -499,20 +510,24 @@ func (bc *Blockchain) GetBlock(hash util.Uint256) (*Block, error) {
 	if err != nil {
 		return nil, err
 	}
-	// TODO: persist TX first before we can handle this logic.
-	// if len(block.Transactions) == 0 {
-	// 	return nil, fmt.Errorf("block has no TX")
-	// }
-	return block, nil
+	return block, err
 }
 
 // GetHeader returns data block header identified with the given hash value.
 func (bc *Blockchain) GetHeader(hash util.Uint256) (*Header, error) {
-	b, err := bc.Get(storage.AppendPrefix(storage.DataBlock, hash.BytesReverse()))
+	header, err := getHeaderFromStore(bc.memStore, hash)
 	if err != nil {
-		return nil, err
+		header, err = getHeaderFromStore(bc.Store, hash)
+		if err != nil {
+			return nil, err
+		}
 	}
-	block, err := NewBlockFromTrimmedBytes(b)
+	return header, err
+}
+
+// getHeaderFromStore returns Header by the given hash from the store.
+func getHeaderFromStore(s storage.Store, hash util.Uint256) (*Header, error) {
+	block, err := getBlockFromStore(s, hash)
 	if err != nil {
 		return nil, err
 	}
@@ -522,12 +537,16 @@ func (bc *Blockchain) GetHeader(hash util.Uint256) (*Header, error) {
 // HasTransaction return true if the blockchain contains he given
 // transaction hash.
 func (bc *Blockchain) HasTransaction(hash util.Uint256) bool {
-	if bc.memPool.ContainsKey(hash) {
-		return true
-	}
+	return bc.memPool.ContainsKey(hash) ||
+		checkTransactionInStore(bc.memStore, hash) ||
+		checkTransactionInStore(bc.Store, hash)
+}
 
+// checkTransactionInStore returns true if the given store contains the given
+// Transaction hash.
+func checkTransactionInStore(s storage.Store, hash util.Uint256) bool {
 	key := storage.AppendPrefix(storage.DataTransaction, hash.BytesReverse())
-	if _, err := bc.Get(key); err == nil {
+	if _, err := s.Get(key); err == nil {
 		return true
 	}
 	return false
@@ -582,31 +601,43 @@ func (bc *Blockchain) HeaderHeight() uint32 {
 
 // GetAssetState returns asset state from its assetID
 func (bc *Blockchain) GetAssetState(assetID util.Uint256) *AssetState {
-	var as *AssetState
-	bc.Store.Seek(storage.STAsset.Bytes(), func(k, v []byte) {
-		var a AssetState
-		r := io.NewBinReaderFromBuf(v)
-		a.DecodeBinary(r)
-		if r.Err == nil && a.ID == assetID {
-			as = &a
-		}
-	})
-
+	as := getAssetStateFromStore(bc.memStore, assetID)
+	if as == nil {
+		as = getAssetStateFromStore(bc.Store, assetID)
+	}
 	return as
 }
 
+// getAssetStateFromStore returns given asset state as recorded in the given
+// store.
+func getAssetStateFromStore(s storage.Store, assetID util.Uint256) *AssetState {
+	key := storage.AppendPrefix(storage.STAsset, assetID.Bytes())
+	asEncoded, err := s.Get(key)
+	if err != nil {
+		return nil
+	}
+	var a AssetState
+	r := io.NewBinReaderFromBuf(asEncoded)
+	a.DecodeBinary(r)
+	if r.Err != nil || a.ID != assetID {
+		return nil
+	}
+
+	return &a
+}
+
 // GetAccountState returns the account state from its script hash
 func (bc *Blockchain) GetAccountState(scriptHash util.Uint160) *AccountState {
-	var as *AccountState
-	bc.Store.Seek(storage.STAccount.Bytes(), func(k, v []byte) {
-		var a AccountState
-		r := io.NewBinReaderFromBuf(v)
-		a.DecodeBinary(r)
-		if r.Err == nil && a.ScriptHash == scriptHash {
-			as = &a
+	as, err := getAccountStateFromStore(bc.memStore, scriptHash)
+	if as == nil {
+		if err != storage.ErrKeyNotFound {
+			log.Warnf("failed to get account state: %s", err)
 		}
-	})
-
+		as, err = getAccountStateFromStore(bc.Store, scriptHash)
+		if as == nil && err != storage.ErrKeyNotFound {
+			log.Warnf("failed to get account state: %s", err)
+		}
+	}
 	return as
 }
 
diff --git a/pkg/core/blockchain_test.go b/pkg/core/blockchain_test.go
index 018bb3096..1943d1610 100644
--- a/pkg/core/blockchain_test.go
+++ b/pkg/core/blockchain_test.go
@@ -13,9 +13,6 @@ import (
 
 func TestAddHeaders(t *testing.T) {
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 	h1 := newBlock(1).Header()
 	h2 := newBlock(2).Header()
 	h3 := newBlock(3).Header()
@@ -24,7 +21,6 @@ func TestAddHeaders(t *testing.T) {
 		t.Fatal(err)
 	}
 
-	assert.Equal(t, 0, bc.blockCache.Len())
 	assert.Equal(t, h3.Index, bc.HeaderHeight())
 	assert.Equal(t, uint32(0), bc.BlockHeight())
 	assert.Equal(t, h3.Hash(), bc.CurrentHeaderHash())
@@ -41,9 +37,6 @@ func TestAddHeaders(t *testing.T) {
 
 func TestAddBlock(t *testing.T) {
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 	blocks := []*Block{
 		newBlock(1),
 		newBlock(2),
@@ -57,15 +50,11 @@ func TestAddBlock(t *testing.T) {
 	}
 
 	lastBlock := blocks[len(blocks)-1]
-	assert.Equal(t, 3, bc.blockCache.Len())
 	assert.Equal(t, lastBlock.Index, bc.HeaderHeight())
 	assert.Equal(t, lastBlock.Hash(), bc.CurrentHeaderHash())
 
-	t.Log(bc.blockCache)
-
-	if err := bc.Persist(context.Background()); err != nil {
-		t.Fatal(err)
-	}
+	// This one tests persisting blocks, so it does need to persist()
+	require.NoError(t, bc.persist(context.Background()))
 
 	for _, block := range blocks {
 		key := storage.AppendPrefix(storage.DataBlock, block.Hash().BytesReverse())
@@ -76,33 +65,30 @@ func TestAddBlock(t *testing.T) {
 
 	assert.Equal(t, lastBlock.Index, bc.BlockHeight())
 	assert.Equal(t, lastBlock.Hash(), bc.CurrentHeaderHash())
-	assert.Equal(t, 0, bc.blockCache.Len())
 }
 
 func TestGetHeader(t *testing.T) {
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 	block := newBlock(1)
 	err := bc.AddBlock(block)
 	assert.Nil(t, err)
 
-	hash := block.Hash()
-	header, err := bc.GetHeader(hash)
-	require.NoError(t, err)
-	assert.Equal(t, block.Header(), header)
+	// Test unpersisted and persisted access
+	for i := 0; i < 2; i++ {
+		hash := block.Hash()
+		header, err := bc.GetHeader(hash)
+		require.NoError(t, err)
+		assert.Equal(t, block.Header(), header)
 
-	block = newBlock(2)
-	_, err = bc.GetHeader(block.Hash())
-	assert.Error(t, err)
+		b2 := newBlock(2)
+		_, err = bc.GetHeader(b2.Hash())
+		assert.Error(t, err)
+		assert.NoError(t, bc.persist(context.Background()))
+	}
 }
 
 func TestGetBlock(t *testing.T) {
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 	blocks := makeBlocks(100)
 
 	for i := 0; i < len(blocks); i++ {
@@ -111,21 +97,22 @@ func TestGetBlock(t *testing.T) {
 		}
 	}
 
-	for i := 0; i < len(blocks); i++ {
-		block, err := bc.GetBlock(blocks[i].Hash())
-		if err != nil {
-			t.Fatal(err)
+	// Test unpersisted and persisted access
+	for j := 0; j < 2; j++ {
+		for i := 0; i < len(blocks); i++ {
+			block, err := bc.GetBlock(blocks[i].Hash())
+			if err != nil {
+				t.Fatal(err)
+			}
+			assert.Equal(t, blocks[i].Index, block.Index)
+			assert.Equal(t, blocks[i].Hash(), block.Hash())
 		}
-		assert.Equal(t, blocks[i].Index, block.Index)
-		assert.Equal(t, blocks[i].Hash(), block.Hash())
+		assert.NoError(t, bc.persist(context.Background()))
 	}
 }
 
 func TestHasBlock(t *testing.T) {
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 	blocks := makeBlocks(50)
 
 	for i := 0; i < len(blocks); i++ {
@@ -133,37 +120,39 @@ func TestHasBlock(t *testing.T) {
 			t.Fatal(err)
 		}
 	}
-	assert.Nil(t, bc.Persist(context.Background()))
 
-	for i := 0; i < len(blocks); i++ {
-		assert.True(t, bc.HasBlock(blocks[i].Hash()))
+	// Test unpersisted and persisted access
+	for j := 0; j < 2; j++ {
+		for i := 0; i < len(blocks); i++ {
+			assert.True(t, bc.HasBlock(blocks[i].Hash()))
+		}
+		newBlock := newBlock(51)
+		assert.False(t, bc.HasBlock(newBlock.Hash()))
+		assert.NoError(t, bc.persist(context.Background()))
 	}
-
-	newBlock := newBlock(51)
-	assert.False(t, bc.HasBlock(newBlock.Hash()))
 }
 
 func TestGetTransaction(t *testing.T) {
+	b1 := getDecodedBlock(t, 1)
 	block := getDecodedBlock(t, 2)
 	bc := newTestChain(t)
-	defer func() {
-		require.NoError(t, bc.Close())
-	}()
 
+	assert.Nil(t, bc.AddBlock(b1))
 	assert.Nil(t, bc.AddBlock(block))
-	assert.Nil(t, bc.persistBlock(block))
 
-	tx, height, err := bc.GetTransaction(block.Transactions[0].Hash())
-	if err != nil {
-		t.Fatal(err)
+	// Test unpersisted and persisted access
+	for j := 0; j < 2; j++ {
+		tx, height, err := bc.GetTransaction(block.Transactions[0].Hash())
+		require.Nil(t, err)
+		assert.Equal(t, block.Index, height)
+		assert.Equal(t, block.Transactions[0], tx)
+		assert.Equal(t, 10, io.GetVarSize(tx))
+		assert.Equal(t, 1, io.GetVarSize(tx.Attributes))
+		assert.Equal(t, 1, io.GetVarSize(tx.Inputs))
+		assert.Equal(t, 1, io.GetVarSize(tx.Outputs))
+		assert.Equal(t, 1, io.GetVarSize(tx.Scripts))
+		assert.NoError(t, bc.persist(context.Background()))
 	}
-	assert.Equal(t, block.Index, height)
-	assert.Equal(t, block.Transactions[0], tx)
-	assert.Equal(t, 10, io.GetVarSize(tx))
-	assert.Equal(t, 1, io.GetVarSize(tx.Attributes))
-	assert.Equal(t, 1, io.GetVarSize(tx.Inputs))
-	assert.Equal(t, 1, io.GetVarSize(tx.Outputs))
-	assert.Equal(t, 1, io.GetVarSize(tx.Scripts))
 }
 
 func newTestChain(t *testing.T) *Blockchain {
diff --git a/pkg/core/cache.go b/pkg/core/cache.go
deleted file mode 100644
index c2141851e..000000000
--- a/pkg/core/cache.go
+++ /dev/null
@@ -1,87 +0,0 @@
-package core
-
-import (
-	"sync"
-
-	"github.com/CityOfZion/neo-go/pkg/util"
-)
-
-// Cache is data structure with fixed type key of Uint256, but has a
-// generic value. Used for block, tx and header cache types.
-type Cache struct {
-	lock sync.RWMutex
-	m    map[util.Uint256]interface{}
-}
-
-// NewCache returns a ready to use Cache object.
-func NewCache() *Cache {
-	return &Cache{
-		m: make(map[util.Uint256]interface{}),
-	}
-}
-
-// GetBlock will return a Block type from the cache.
-func (c *Cache) GetBlock(h util.Uint256) (block *Block, ok bool) {
-	c.lock.RLock()
-	defer c.lock.RUnlock()
-	return c.getBlock(h)
-}
-
-func (c *Cache) getBlock(h util.Uint256) (block *Block, ok bool) {
-	if v, b := c.m[h]; b {
-		block, ok = v.(*Block)
-		return
-	}
-	return
-}
-
-// Add adds the given hash along with its value to the cache.
-func (c *Cache) Add(h util.Uint256, v interface{}) {
-	c.lock.Lock()
-	defer c.lock.Unlock()
-	c.add(h, v)
-}
-
-func (c *Cache) add(h util.Uint256, v interface{}) {
-	c.m[h] = v
-}
-
-func (c *Cache) has(h util.Uint256) bool {
-	_, ok := c.m[h]
-	return ok
-}
-
-// Has returns whether the cache contains the given hash.
-func (c *Cache) Has(h util.Uint256) bool {
-	c.lock.Lock()
-	defer c.lock.Unlock()
-	return c.has(h)
-}
-
-// Len return the number of items present in the cache.
-func (c *Cache) Len() int {
-	c.lock.RLock()
-	defer c.lock.RUnlock()
-	return len(c.m)
-}
-
-// Delete removes the item out of the cache.
-func (c *Cache) Delete(h util.Uint256) {
-	c.lock.Lock()
-	defer c.lock.Unlock()
-	delete(c.m, h)
-}
-
-// ReapStrangeBlocks drops blocks from cache that don't fit into the
-// blkHeight-headHeight interval. Cache should only contain blocks that we
-// expect to get and store.
-func (c *Cache) ReapStrangeBlocks(blkHeight, headHeight uint32) {
-	c.lock.Lock()
-	defer c.lock.Unlock()
-	for i, b := range c.m {
-		block, ok := b.(*Block)
-		if ok && (block.Index < blkHeight || block.Index > headHeight) {
-			delete(c.m, i)
-		}
-	}
-}
diff --git a/pkg/core/storage/boltdb_store.go b/pkg/core/storage/boltdb_store.go
index ffa1d4ecb..18283bc63 100644
--- a/pkg/core/storage/boltdb_store.go
+++ b/pkg/core/storage/boltdb_store.go
@@ -24,25 +24,6 @@ type BoltDBStore struct {
 	db *bbolt.DB
 }
 
-// BoltDBBatch simple batch implementation to satisfy the Store interface.
-type BoltDBBatch struct {
-	mem map[*[]byte][]byte
-}
-
-// Len implements the Batch interface.
-func (b *BoltDBBatch) Len() int {
-	return len(b.mem)
-}
-
-// Put implements the Batch interface.
-func (b *BoltDBBatch) Put(k, v []byte) {
-	vcopy := make([]byte, len(v))
-	copy(vcopy, v)
-	kcopy := make([]byte, len(k))
-	copy(kcopy, k)
-	b.mem[&kcopy] = vcopy
-}
-
 // NewBoltDBStore returns a new ready to use BoltDB storage with created bucket.
 func NewBoltDBStore(cfg BoltDBOptions) (*BoltDBStore, error) {
 	var opts *bbolt.Options       // should be exposed via BoltDBOptions if anything needed
@@ -94,7 +75,7 @@ func (s *BoltDBStore) Get(key []byte) (val []byte, err error) {
 func (s *BoltDBStore) PutBatch(batch Batch) error {
 	return s.db.Batch(func(tx *bbolt.Tx) error {
 		b := tx.Bucket(Bucket)
-		for k, v := range batch.(*BoltDBBatch).mem {
+		for k, v := range batch.(*MemoryBatch).m {
 			err := b.Put(*k, v)
 			if err != nil {
 				return err
@@ -122,9 +103,7 @@ func (s *BoltDBStore) Seek(key []byte, f func(k, v []byte)) {
 // Batch implements the Batch interface and returns a boltdb
 // compatible Batch.
 func (s *BoltDBStore) Batch() Batch {
-	return &BoltDBBatch{
-		mem: make(map[*[]byte][]byte),
-	}
+	return newMemoryBatch()
 }
 
 // Close releases all db resources.
diff --git a/pkg/core/storage/boltdb_store_test.go b/pkg/core/storage/boltdb_store_test.go
index ac23d136a..e5cf397b1 100644
--- a/pkg/core/storage/boltdb_store_test.go
+++ b/pkg/core/storage/boltdb_store_test.go
@@ -12,14 +12,14 @@ import (
 
 func TestBoltDBBatch(t *testing.T) {
 	boltDB := BoltDBStore{}
-	want := &BoltDBBatch{mem: map[*[]byte][]byte{}}
+	want := &MemoryBatch{m: map[*[]byte][]byte{}}
 	if got := boltDB.Batch(); !reflect.DeepEqual(got, want) {
 		t.Errorf("BoltDB Batch() = %v, want %v", got, want)
 	}
 }
 
 func TestBoltDBBatch_Len(t *testing.T) {
-	batch := &BoltDBBatch{mem: map[*[]byte][]byte{}}
+	batch := &MemoryBatch{m: map[*[]byte][]byte{}}
 	want := len(map[*[]byte][]byte{})
 	assert.Equal(t, want, batch.Len())
 }
diff --git a/pkg/core/storage/leveldb_store.go b/pkg/core/storage/leveldb_store.go
index 1bc6e013b..f024c41d3 100644
--- a/pkg/core/storage/leveldb_store.go
+++ b/pkg/core/storage/leveldb_store.go
@@ -41,7 +41,11 @@ func (s *LevelDBStore) Put(key, value []byte) error {
 
 // Get implements the Store interface.
 func (s *LevelDBStore) Get(key []byte) ([]byte, error) {
-	return s.db.Get(key, nil)
+	value, err := s.db.Get(key, nil)
+	if err == leveldb.ErrNotFound {
+		err = ErrKeyNotFound
+	}
+	return value, err
 }
 
 // PutBatch implements the Store interface.
diff --git a/pkg/core/storage/memory_store.go b/pkg/core/storage/memory_store.go
index 4c9d2f33f..789dffdbb 100644
--- a/pkg/core/storage/memory_store.go
+++ b/pkg/core/storage/memory_store.go
@@ -9,7 +9,7 @@ import (
 // MemoryStore is an in-memory implementation of a Store, mainly
 // used for testing. Do not use MemoryStore in production.
 type MemoryStore struct {
-	*sync.RWMutex
+	mut sync.RWMutex
 	mem map[string][]byte
 }
 
@@ -20,8 +20,11 @@ type MemoryBatch struct {
 
 // Put implements the Batch interface.
 func (b *MemoryBatch) Put(k, v []byte) {
-	key := &k
-	b.m[key] = v
+	vcopy := make([]byte, len(v))
+	copy(vcopy, v)
+	kcopy := make([]byte, len(k))
+	copy(kcopy, k)
+	b.m[&kcopy] = vcopy
 }
 
 // Len implements the Batch interface.
@@ -32,36 +35,33 @@ func (b *MemoryBatch) Len() int {
 // NewMemoryStore creates a new MemoryStore object.
 func NewMemoryStore() *MemoryStore {
 	return &MemoryStore{
-		RWMutex: new(sync.RWMutex),
-		mem:     make(map[string][]byte),
+		mem: make(map[string][]byte),
 	}
 }
 
 // Get implements the Store interface.
 func (s *MemoryStore) Get(key []byte) ([]byte, error) {
-	s.RLock()
-	defer s.RUnlock()
+	s.mut.RLock()
+	defer s.mut.RUnlock()
 	if val, ok := s.mem[makeKey(key)]; ok {
 		return val, nil
 	}
 	return nil, ErrKeyNotFound
 }
 
-// Put implements the Store interface.
+// Put implements the Store interface. Never returns an error.
 func (s *MemoryStore) Put(key, value []byte) error {
-	s.Lock()
+	s.mut.Lock()
 	s.mem[makeKey(key)] = value
-	s.Unlock()
+	s.mut.Unlock()
 	return nil
 }
 
-// PutBatch implements the Store interface.
+// PutBatch implements the Store interface. Never returns an error.
 func (s *MemoryStore) PutBatch(batch Batch) error {
 	b := batch.(*MemoryBatch)
 	for k, v := range b.m {
-		if err := s.Put(*k, v); err != nil {
-			return err
-		}
+		_ = s.Put(*k, v)
 	}
 	return nil
 }
@@ -78,16 +78,44 @@ func (s *MemoryStore) Seek(key []byte, f func(k, v []byte)) {
 
 // Batch implements the Batch interface and returns a compatible Batch.
 func (s *MemoryStore) Batch() Batch {
+	return newMemoryBatch()
+}
+
+// newMemoryBatch returns new memory batch.
+func newMemoryBatch() *MemoryBatch {
 	return &MemoryBatch{
 		m: make(map[*[]byte][]byte),
 	}
 }
 
-// Close implements Store interface and clears up memory.
+// Persist flushes all the MemoryStore contents into the (supposedly) persistent
+// store provided via parameter.
+func (s *MemoryStore) Persist(ps Store) (int, error) {
+	s.mut.Lock()
+	defer s.mut.Unlock()
+	batch := ps.Batch()
+	keys := 0
+	for k, v := range s.mem {
+		kb, _ := hex.DecodeString(k)
+		batch.Put(kb, v)
+		keys++
+	}
+	var err error
+	if keys != 0 {
+		err = ps.PutBatch(batch)
+	}
+	if err == nil {
+		s.mem = make(map[string][]byte)
+	}
+	return keys, err
+}
+
+// Close implements Store interface and clears up memory. Never returns an
+// error.
 func (s *MemoryStore) Close() error {
-	s.Lock()
+	s.mut.Lock()
 	s.mem = nil
-	s.Unlock()
+	s.mut.Unlock()
 	return nil
 }
 
diff --git a/pkg/core/storage/memory_store_test.go b/pkg/core/storage/memory_store_test.go
index 1ad760e3e..30aa526fd 100644
--- a/pkg/core/storage/memory_store_test.go
+++ b/pkg/core/storage/memory_store_test.go
@@ -75,3 +75,54 @@ func TestMemoryStore_Seek(t *testing.T) {
 		assert.Equal(t, value, v)
 	})
 }
+
+func TestMemoryStorePersist(t *testing.T) {
+	// temporary Store
+	ts := NewMemoryStore()
+	// persistent Store
+	ps := NewMemoryStore()
+	// persisting nothing should do nothing
+	c, err := ts.Persist(ps)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, 0, c)
+	// persisting one key should result in one key in ps and nothing in ts
+	assert.NoError(t, ts.Put([]byte("key"), []byte("value")))
+	c, err = ts.Persist(ps)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, 1, c)
+	v, err := ps.Get([]byte("key"))
+	assert.Equal(t, nil, err)
+	assert.Equal(t, []byte("value"), v)
+	v, err = ts.Get([]byte("key"))
+	assert.Equal(t, ErrKeyNotFound, err)
+	assert.Equal(t, []byte(nil), v)
+	// now we overwrite the previous `key` contents and also add `key2`,
+	assert.NoError(t, ts.Put([]byte("key"), []byte("newvalue")))
+	assert.NoError(t, ts.Put([]byte("key2"), []byte("value2")))
+	// this is to check that now key is written into the ps before we do
+	// persist
+	v, err = ps.Get([]byte("key2"))
+	assert.Equal(t, ErrKeyNotFound, err)
+	assert.Equal(t, []byte(nil), v)
+	// two keys should be persisted (one overwritten and one new) and
+	// available in the ps
+	c, err = ts.Persist(ps)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, 2, c)
+	v, err = ts.Get([]byte("key"))
+	assert.Equal(t, ErrKeyNotFound, err)
+	assert.Equal(t, []byte(nil), v)
+	v, err = ts.Get([]byte("key2"))
+	assert.Equal(t, ErrKeyNotFound, err)
+	assert.Equal(t, []byte(nil), v)
+	v, err = ps.Get([]byte("key"))
+	assert.Equal(t, nil, err)
+	assert.Equal(t, []byte("newvalue"), v)
+	v, err = ps.Get([]byte("key2"))
+	assert.Equal(t, nil, err)
+	assert.Equal(t, []byte("value2"), v)
+	// we've persisted some values, make sure successive persist is a no-op
+	c, err = ts.Persist(ps)
+	assert.Equal(t, nil, err)
+	assert.Equal(t, 0, c)
+}
diff --git a/pkg/core/storage/redis_store.go b/pkg/core/storage/redis_store.go
index a401ce08d..5dd5ac4e0 100644
--- a/pkg/core/storage/redis_store.go
+++ b/pkg/core/storage/redis_store.go
@@ -18,28 +18,6 @@ type RedisStore struct {
 	client *redis.Client
 }
 
-// RedisBatch simple batch implementation to satisfy the Store interface.
-type RedisBatch struct {
-	mem map[string]string
-}
-
-// Len implements the Batch interface.
-func (b *RedisBatch) Len() int {
-	return len(b.mem)
-}
-
-// Put implements the Batch interface.
-func (b *RedisBatch) Put(k, v []byte) {
-	b.mem[string(k)] = string(v)
-}
-
-// NewRedisBatch returns a new ready to use RedisBatch.
-func NewRedisBatch() *RedisBatch {
-	return &RedisBatch{
-		mem: make(map[string]string),
-	}
-}
-
 // NewRedisStore returns an new initialized - ready to use RedisStore object.
 func NewRedisStore(cfg RedisDBOptions) (*RedisStore, error) {
 	c := redis.NewClient(&redis.Options{
@@ -55,13 +33,16 @@ func NewRedisStore(cfg RedisDBOptions) (*RedisStore, error) {
 
 // Batch implements the Store interface.
 func (s *RedisStore) Batch() Batch {
-	return NewRedisBatch()
+	return newMemoryBatch()
 }
 
 // Get implements the Store interface.
 func (s *RedisStore) Get(k []byte) ([]byte, error) {
 	val, err := s.client.Get(string(k)).Result()
 	if err != nil {
+		if err == redis.Nil {
+			err = ErrKeyNotFound
+		}
 		return nil, err
 	}
 	return []byte(val), nil
@@ -76,8 +57,8 @@ func (s *RedisStore) Put(k, v []byte) error {
 // PutBatch implements the Store interface.
 func (s *RedisStore) PutBatch(b Batch) error {
 	pipe := s.client.Pipeline()
-	for k, v := range b.(*RedisBatch).mem {
-		pipe.Set(k, v, 0)
+	for k, v := range b.(*MemoryBatch).m {
+		pipe.Set(string(*k), v, 0)
 	}
 	_, err := pipe.Exec()
 	return err
diff --git a/pkg/core/storage/redis_store_test.go b/pkg/core/storage/redis_store_test.go
index 12403b974..f60f76922 100644
--- a/pkg/core/storage/redis_store_test.go
+++ b/pkg/core/storage/redis_store_test.go
@@ -1,7 +1,6 @@
 package storage
 
 import (
-	"reflect"
 	"testing"
 
 	"github.com/alicebob/miniredis"
@@ -9,13 +8,6 @@ import (
 	"github.com/stretchr/testify/require"
 )
 
-func TestNewRedisBatch(t *testing.T) {
-	want := &RedisBatch{mem: map[string]string{}}
-	if got := NewRedisBatch(); !reflect.DeepEqual(got, want) {
-		t.Errorf("NewRedisBatch() = %v, want %v", got, want)
-	}
-}
-
 func TestNewRedisStore(t *testing.T) {
 	redisMock, redisStore := prepareRedisMock(t)
 	key := []byte("testKey")
@@ -33,50 +25,10 @@ func TestNewRedisStore(t *testing.T) {
 
 func TestRedisBatch_Len(t *testing.T) {
 	want := len(map[string]string{})
-	b := &RedisBatch{
-		mem: map[string]string{},
+	b := &MemoryBatch{
+		m: map[*[]byte][]byte{},
 	}
-	assert.Equal(t, len(b.mem), want)
-}
-
-func TestRedisBatch_Put(t *testing.T) {
-	type args struct {
-		k []byte
-		v []byte
-	}
-	tests := []struct {
-		name string
-		args args
-		want *RedisBatch
-	}{
-		{"TestRedisBatch_Put_Strings",
-			args{
-				k: []byte("foo"),
-				v: []byte("bar"),
-			},
-			&RedisBatch{mem: map[string]string{"foo": "bar"}},
-		},
-		{"TestRedisBatch_Put_Numbers",
-			args{
-				k: []byte("123"),
-				v: []byte("456"),
-			},
-			&RedisBatch{mem: map[string]string{"123": "456"}},
-		},
-	}
-	for _, tt := range tests {
-		t.Run(tt.name, func(t *testing.T) {
-			actual := &RedisBatch{mem: map[string]string{}}
-			actual.Put(tt.args.k, tt.args.v)
-			assert.Equal(t, tt.want, actual)
-		})
-	}
-}
-
-func TestRedisStore_Batch(t *testing.T) {
-	want := &RedisBatch{mem: map[string]string{}}
-	actual := NewRedisBatch()
-	assert.Equal(t, want, actual)
+	assert.Equal(t, len(b.m), want)
 }
 
 func TestRedisStore_GetAndPut(t *testing.T) {
@@ -130,7 +82,7 @@ func TestRedisStore_GetAndPut(t *testing.T) {
 }
 
 func TestRedisStore_PutBatch(t *testing.T) {
-	batch := &RedisBatch{mem: map[string]string{"foo1": "bar1"}}
+	batch := &MemoryBatch{m: map[*[]byte][]byte{&[]byte{'f', 'o', 'o', '1'}: []byte("bar1")}}
 	mock, redisStore := prepareRedisMock(t)
 	err := redisStore.PutBatch(batch)
 	assert.Nil(t, err, "Error while PutBatch")
diff --git a/pkg/core/unspent_coin_state.go b/pkg/core/unspent_coin_state.go
index 9f8026578..1b7aa408c 100644
--- a/pkg/core/unspent_coin_state.go
+++ b/pkg/core/unspent_coin_state.go
@@ -13,11 +13,36 @@ import (
 // coin state.
 type UnspentCoins map[util.Uint256]*UnspentCoinState
 
-func (u UnspentCoins) getAndUpdate(s storage.Store, hash util.Uint256) (*UnspentCoinState, error) {
+// getAndUpdate retreives UnspentCoinState from temporary or persistent Store
+// and return it. If it's not present in both stores, returns a new
+// UnspentCoinState.
+func (u UnspentCoins) getAndUpdate(ts storage.Store, ps storage.Store, hash util.Uint256) (*UnspentCoinState, error) {
 	if unspent, ok := u[hash]; ok {
 		return unspent, nil
 	}
 
+	unspent, err := getUnspentCoinStateFromStore(ts, hash)
+	if err != nil {
+		if err != storage.ErrKeyNotFound {
+			return nil, err
+		}
+		unspent, err = getUnspentCoinStateFromStore(ps, hash)
+		if err != nil {
+			if err != storage.ErrKeyNotFound {
+				return nil, err
+			}
+			unspent = &UnspentCoinState{
+				states: []CoinState{},
+			}
+		}
+	}
+
+	u[hash] = unspent
+	return unspent, nil
+}
+
+// getUnspentCoinStateFromStore retrieves UnspentCoinState from the given store
+func getUnspentCoinStateFromStore(s storage.Store, hash util.Uint256) (*UnspentCoinState, error) {
 	unspent := &UnspentCoinState{}
 	key := storage.AppendPrefix(storage.STCoin, hash.BytesReverse())
 	if b, err := s.Get(key); err == nil {
@@ -27,12 +52,8 @@ func (u UnspentCoins) getAndUpdate(s storage.Store, hash util.Uint256) (*Unspent
 			return nil, fmt.Errorf("failed to decode (UnspentCoinState): %s", r.Err)
 		}
 	} else {
-		unspent = &UnspentCoinState{
-			states: []CoinState{},
-		}
+		return nil, err
 	}
-
-	u[hash] = unspent
 	return unspent, nil
 }
 
diff --git a/pkg/network/blockqueue.go b/pkg/network/blockqueue.go
new file mode 100644
index 000000000..501ddd804
--- /dev/null
+++ b/pkg/network/blockqueue.go
@@ -0,0 +1,77 @@
+package network
+
+import (
+	"github.com/CityOfZion/neo-go/pkg/core"
+	"github.com/Workiva/go-datastructures/queue"
+	log "github.com/sirupsen/logrus"
+)
+
+type blockQueue struct {
+	queue       *queue.PriorityQueue
+	checkBlocks chan struct{}
+	chain       core.Blockchainer
+}
+
+func newBlockQueue(capacity int, bc core.Blockchainer) *blockQueue {
+	return &blockQueue{
+		queue:       queue.NewPriorityQueue(capacity, false),
+		checkBlocks: make(chan struct{}, 1),
+		chain:       bc,
+	}
+}
+
+func (bq *blockQueue) run() {
+	for {
+		_, ok := <-bq.checkBlocks
+		if !ok {
+			break
+		}
+		for {
+			item := bq.queue.Peek()
+			if item == nil {
+				break
+			}
+			minblock := item.(*core.Block)
+			if minblock.Index <= bq.chain.BlockHeight()+1 {
+				_, _ = bq.queue.Get(1)
+				if minblock.Index == bq.chain.BlockHeight()+1 {
+					err := bq.chain.AddBlock(minblock)
+					if err != nil {
+						log.WithFields(log.Fields{
+							"error":       err.Error(),
+							"blockHeight": bq.chain.BlockHeight(),
+							"nextIndex":   minblock.Index,
+						}).Warn("blockQueue: failed adding block into the blockchain")
+					}
+				}
+			} else {
+				break
+			}
+		}
+	}
+}
+
+func (bq *blockQueue) putBlock(block *core.Block) error {
+	if bq.chain.BlockHeight() >= block.Index {
+		// can easily happen when fetching the same blocks from
+		// different peers, thus not considered as error
+		return nil
+	}
+	err := bq.queue.Put(block)
+	select {
+	case bq.checkBlocks <- struct{}{}:
+		// ok, signalled to goroutine processing queue
+	default:
+		// it's already busy processing blocks
+	}
+	return err
+}
+
+func (bq *blockQueue) discard() {
+	close(bq.checkBlocks)
+	bq.queue.Dispose()
+}
+
+func (bq *blockQueue) length() int {
+	return bq.queue.Len()
+}
diff --git a/pkg/network/blockqueue_test.go b/pkg/network/blockqueue_test.go
new file mode 100644
index 000000000..da4124c06
--- /dev/null
+++ b/pkg/network/blockqueue_test.go
@@ -0,0 +1,71 @@
+package network
+
+import (
+	"testing"
+	"time"
+
+	"github.com/CityOfZion/neo-go/pkg/core"
+	"github.com/stretchr/testify/assert"
+)
+
+func TestBlockQueue(t *testing.T) {
+	chain := &testChain{}
+	// notice, it's not yet running
+	bq := newBlockQueue(0, chain)
+	blocks := make([]*core.Block, 11)
+	for i := 1; i < 11; i++ {
+		blocks[i] = &core.Block{BlockBase: core.BlockBase{Index: uint32(i)}}
+	}
+	// not the ones expected currently
+	for i := 3; i < 5; i++ {
+		assert.NoError(t, bq.putBlock(blocks[i]))
+	}
+	// nothing should be put into the blockchain
+	assert.Equal(t, uint32(0), chain.BlockHeight())
+	assert.Equal(t, 2, bq.length())
+	// now added expected ones (with duplicates)
+	for i := 1; i < 5; i++ {
+		assert.NoError(t, bq.putBlock(blocks[i]))
+	}
+	// but they're still not put into the blockchain, because bq isn't running
+	assert.Equal(t, uint32(0), chain.BlockHeight())
+	assert.Equal(t, 4, bq.length())
+	go bq.run()
+	// run() is asynchronous, so we need some kind of timeout anyway and this is the simplest one
+	for i := 0; i < 5; i++ {
+		if chain.BlockHeight() != 4 {
+			time.Sleep(time.Second)
+		}
+	}
+	assert.Equal(t, 0, bq.length())
+	assert.Equal(t, uint32(4), chain.BlockHeight())
+	// put some old blocks
+	for i := 1; i < 5; i++ {
+		assert.NoError(t, bq.putBlock(blocks[i]))
+	}
+	assert.Equal(t, 0, bq.length())
+	assert.Equal(t, uint32(4), chain.BlockHeight())
+	// unexpected blocks with run() active
+	assert.NoError(t, bq.putBlock(blocks[8]))
+	assert.Equal(t, 1, bq.length())
+	assert.Equal(t, uint32(4), chain.BlockHeight())
+	assert.NoError(t, bq.putBlock(blocks[7]))
+	assert.Equal(t, 2, bq.length())
+	assert.Equal(t, uint32(4), chain.BlockHeight())
+	// sparse put
+	assert.NoError(t, bq.putBlock(blocks[10]))
+	assert.Equal(t, 3, bq.length())
+	assert.Equal(t, uint32(4), chain.BlockHeight())
+	assert.NoError(t, bq.putBlock(blocks[6]))
+	assert.NoError(t, bq.putBlock(blocks[5]))
+	// run() is asynchronous, so we need some kind of timeout anyway and this is the simplest one
+	for i := 0; i < 5; i++ {
+		if chain.BlockHeight() != 8 {
+			time.Sleep(time.Second)
+		}
+	}
+	assert.Equal(t, 1, bq.length())
+	assert.Equal(t, uint32(8), chain.BlockHeight())
+	bq.discard()
+	assert.Equal(t, 0, bq.length())
+}
diff --git a/pkg/network/helper_test.go b/pkg/network/helper_test.go
index bcbdff5df..5580f3873 100644
--- a/pkg/network/helper_test.go
+++ b/pkg/network/helper_test.go
@@ -3,6 +3,7 @@ package network
 import (
 	"math/rand"
 	"net"
+	"sync/atomic"
 	"testing"
 	"time"
 
@@ -13,7 +14,9 @@ import (
 	"github.com/CityOfZion/neo-go/pkg/util"
 )
 
-type testChain struct{}
+type testChain struct {
+	blockheight uint32
+}
 
 func (chain testChain) GetConfig() config.ProtocolConfiguration {
 	panic("TODO")
@@ -38,11 +41,14 @@ func (chain testChain) NetworkFee(t *transaction.Transaction) util.Fixed8 {
 func (chain testChain) AddHeaders(...*core.Header) error {
 	panic("TODO")
 }
-func (chain testChain) AddBlock(*core.Block) error {
-	panic("TODO")
+func (chain *testChain) AddBlock(block *core.Block) error {
+	if block.Index == chain.blockheight+1 {
+		atomic.StoreUint32(&chain.blockheight, block.Index)
+	}
+	return nil
 }
-func (chain testChain) BlockHeight() uint32 {
-	return 0
+func (chain *testChain) BlockHeight() uint32 {
+	return atomic.LoadUint32(&chain.blockheight)
 }
 func (chain testChain) HeaderHeight() uint32 {
 	return 0
@@ -168,7 +174,7 @@ func (p *localPeer) Handshaked() bool {
 func newTestServer() *Server {
 	return &Server{
 		ServerConfig: ServerConfig{},
-		chain:        testChain{},
+		chain:        &testChain{},
 		transport:    localTransport{},
 		discovery:    testDiscovery{},
 		id:           rand.Uint32(),
diff --git a/pkg/network/server.go b/pkg/network/server.go
index 1de1b060d..a1caa2fa5 100644
--- a/pkg/network/server.go
+++ b/pkg/network/server.go
@@ -45,6 +45,7 @@ type (
 		transport Transporter
 		discovery Discoverer
 		chain     core.Blockchainer
+		bQueue    *blockQueue
 
 		lock  sync.RWMutex
 		peers map[Peer]bool
@@ -66,6 +67,7 @@ func NewServer(config ServerConfig, chain core.Blockchainer) *Server {
 	s := &Server{
 		ServerConfig: config,
 		chain:        chain,
+		bQueue:       newBlockQueue(maxBlockBatch, chain),
 		id:           rand.Uint32(),
 		quit:         make(chan struct{}),
 		addrReq:      make(chan *Message, minPeers),
@@ -97,6 +99,7 @@ func (s *Server) Start(errChan chan error) {
 
 	s.discovery.BackFill(s.Seeds...)
 
+	go s.bQueue.run()
 	go s.transport.Accept()
 	s.run()
 }
@@ -106,6 +109,7 @@ func (s *Server) Shutdown() {
 	log.WithFields(log.Fields{
 		"peers": s.PeerCount(),
 	}).Info("shutting down server")
+	s.bQueue.discard()
 	close(s.quit)
 }
 
@@ -273,10 +277,7 @@ func (s *Server) handleHeadersCmd(p Peer, headers *payload.Headers) {
 
 // handleBlockCmd processes the received block received from its peer.
 func (s *Server) handleBlockCmd(p Peer, block *core.Block) error {
-	if !s.chain.HasBlock(block.Hash()) {
-		return s.chain.AddBlock(block)
-	}
-	return nil
+	return s.bQueue.putBlock(block)
 }
 
 // handleInvCmd will process the received inventory.
@@ -329,7 +330,7 @@ func (s *Server) requestBlocks(p Peer) error {
 		hashStart    = s.chain.BlockHeight() + 1
 		headerHeight = s.chain.HeaderHeight()
 	)
-	for hashStart < headerHeight && len(hashes) < maxBlockBatch {
+	for hashStart <= headerHeight && len(hashes) < maxBlockBatch {
 		hash := s.chain.GetHeaderHash(int(hashStart))
 		hashes = append(hashes, hash)
 		hashStart++
diff --git a/pkg/rpc/server_helper_test.go b/pkg/rpc/server_helper_test.go
index 2eb7331ac..fd818750f 100644
--- a/pkg/rpc/server_helper_test.go
+++ b/pkg/rpc/server_helper_test.go
@@ -167,7 +167,6 @@ func initBlocks(t *testing.T, chain *core.Blockchain) {
 	for i := 0; i < len(blocks); i++ {
 		require.NoError(t, chain.AddBlock(blocks[i]))
 	}
-	require.NoError(t, chain.Persist(context.Background()))
 }
 
 func makeBlocks(n int) []*core.Block {
diff --git a/pkg/rpc/server_test.go b/pkg/rpc/server_test.go
index 2db969c7c..3d6c139e1 100644
--- a/pkg/rpc/server_test.go
+++ b/pkg/rpc/server_test.go
@@ -13,7 +13,6 @@ import (
 	"time"
 
 	"github.com/stretchr/testify/assert"
-	"github.com/stretchr/testify/require"
 )
 
 func TestRPC(t *testing.T) {
@@ -22,9 +21,6 @@ func TestRPC(t *testing.T) {
 
 	chain, handler := initServerWithInMemoryChain(ctx, t)
 
-	defer func() {
-		require.NoError(t, chain.Close())
-	}()
 	t.Run("getbestblockhash", func(t *testing.T) {
 		rpc := `{"jsonrpc": "2.0", "id": 1, "method": "getbestblockhash", "params": []}`
 		body := doRPCCall(rpc, handler, t)