diff --git a/chain/tests/mine_simple_chain.rs b/chain/tests/mine_simple_chain.rs
index 448bc6c49..eeab5771e 100644
--- a/chain/tests/mine_simple_chain.rs
+++ b/chain/tests/mine_simple_chain.rs
@@ -335,7 +335,10 @@ fn prepare_fork_block_tx(kc: &Keychain, prev: &BlockHeader, chain: &Chain, diff:
 fn prepare_block_nosum(kc: &Keychain, prev: &BlockHeader, diff: u64, txs: Vec<&Transaction>) -> Block {
 	let key_id = kc.derive_key_id(diff as u32).unwrap();
 
-	let mut b = core::core::Block::new(prev, txs, kc, &key_id).unwrap();
+	let mut b = match core::core::Block::new(prev, txs, kc, &key_id) {
+		Err(e) => panic!("{:?}",e),
+		Ok(b) => b
+	};
 	b.header.timestamp = prev.timestamp + time::Duration::seconds(60);
 	b.header.total_difficulty = Difficulty::from_num(diff);
 	b
diff --git a/core/src/core/block.rs b/core/src/core/block.rs
index 66f1dee5c..4d89a39c7 100644
--- a/core/src/core/block.rs
+++ b/core/src/core/block.rs
@@ -341,7 +341,6 @@ impl Block {
 		kernels.sort();
 
 		// calculate the overall Merkle tree and fees (todo?)
-
 		Ok(
 			Block {
 				header: BlockHeader {
@@ -585,7 +584,7 @@ impl Block {
 		let excess = secp.commit_sum(vec![out_commit], vec![over_commit])?;
 
 		let msg = util::secp::Message::from_slice(&[0; secp::constants::MESSAGE_SIZE])?;
-		let sig = keychain.sign(&msg, &key_id)?;
+		let sig = keychain.aggsig_sign_from_key_id(&msg, &key_id).unwrap();
 
 		let excess_sig = sig.serialize_der(&secp);
 
diff --git a/core/src/core/build.rs b/core/src/core/build.rs
index 90044d79c..f691c1b60 100644
--- a/core/src/core/build.rs
+++ b/core/src/core/build.rs
@@ -25,10 +25,9 @@
 //! build::transaction(vec![input_rand(75), output_rand(42), output_rand(32),
 //!   with_fee(1)])
 
-use util::{secp, static_secp_instance};
+use util::{secp, static_secp_instance, kernel_sig_msg};
 
 use core::{Input, Output, SwitchCommitHash, Transaction, DEFAULT_OUTPUT};
-use core::transaction::kernel_sig_msg;
 use util::LOGGER;
 use keychain;
 use keychain::{BlindSum, BlindingFactor, Identifier, Keychain};
@@ -138,7 +137,7 @@ pub fn transaction(
 	);
 	let blind_sum = ctx.keychain.blind_sum(&sum)?;
 	let msg = secp::Message::from_slice(&kernel_sig_msg(tx.fee, tx.lock_height))?;
-	let sig = ctx.keychain.sign_with_blinding(&msg, &blind_sum)?;
+	let sig = Keychain::aggsig_sign_with_blinding(&keychain.secp(), &msg, &blind_sum)?;
 
 	let secp = static_secp_instance();
 	let secp = secp.lock().unwrap();
diff --git a/core/src/core/transaction.rs b/core/src/core/transaction.rs
index dcc69ec54..d680c6667 100644
--- a/core/src/core/transaction.rs
+++ b/core/src/core/transaction.rs
@@ -13,11 +13,9 @@
 // limitations under the License.
 
 //! Transactions
-
-use byteorder::{BigEndian, ByteOrder};
 use blake2::blake2b::blake2b;
 use util::secp::{self, Message, Signature};
-use util::static_secp_instance;
+use util::{static_secp_instance, kernel_sig_msg};
 use util::secp::pedersen::{Commitment, RangeProof};
 use std::cmp::Ordering;
 use std::ops;
@@ -92,14 +90,6 @@ impl From<consensus::Error> for Error {
 	}
 }
 
-/// Construct msg bytes from tx fee and lock_height
-pub fn kernel_sig_msg(fee: u64, lock_height: u64) -> [u8; 32] {
-	let mut bytes = [0; 32];
-	BigEndian::write_u64(&mut bytes[16..24], fee);
-	BigEndian::write_u64(&mut bytes[24..], lock_height);
-	bytes
-}
-
 /// A proof that a transaction sums to zero. Includes both the transaction's
 /// Pedersen commitment and the signature, that guarantees that the commitments
 /// amount to zero.
@@ -166,7 +156,11 @@ impl TxKernel {
 		let secp = static_secp_instance();
 		let secp = secp.lock().unwrap();
 		let sig = try!(Signature::from_der(&secp, &self.excess_sig));
-		secp.verify_from_commit(&msg, &sig, &self.excess)
+		let valid = Keychain::aggsig_verify_single_from_commit(&secp, &sig, &msg, &self.excess);
+		if !valid{
+			return Err(secp::Error::IncorrectSignature);
+		}
+		Ok(())
 	}
 }
 
@@ -330,16 +324,12 @@ impl Transaction {
 		let secp = static_secp_instance();
 		let secp = secp.lock().unwrap();
 		let sig = Signature::from_der(&secp, &self.excess_sig)?;
-
 		// pretend the sum is a public key (which it is, being of the form r.G) and
 		// verify the transaction sig with it
-		//
-		// we originally converted the commitment to a key_id here (commitment to zero)
-		// and then passed the key_id to secp.verify()
-		// the secp api no longer allows us to do this so we have wrapped the complexity
-		// of generating a public key from a commitment behind verify_from_commit
-		secp.verify_from_commit(&msg, &sig, &rsum)?;
-
+		let valid = Keychain::aggsig_verify_single_from_commit(&secp, &sig, &msg, &rsum);
+		if !valid{
+			return Err(secp::Error::IncorrectSignature);
+		}
 		Ok(rsum)
 	}
 
diff --git a/grin/Cargo.toml b/grin/Cargo.toml
index f6bfc512d..4a8b1a108 100644
--- a/grin/Cargo.toml
+++ b/grin/Cargo.toml
@@ -32,3 +32,4 @@ itertools = "~0.6.0"
 
 [dev_dependencies]
 blake2-rfc = "~0.2.17"
+grin_config = { path = "../config" }
diff --git a/grin/src/lib.rs b/grin/src/lib.rs
index d5c5df06a..4a7c67c2f 100644
--- a/grin/src/lib.rs
+++ b/grin/src/lib.rs
@@ -38,7 +38,6 @@ extern crate tokio_timer;
 
 extern crate grin_api as api;
 extern crate grin_chain as chain;
-#[macro_use]
 extern crate grin_core as core;
 extern crate grin_keychain as keychain;
 extern crate grin_p2p as p2p;
diff --git a/grin/src/server.rs b/grin/src/server.rs
index 2021a2e6b..27ca2fd6f 100644
--- a/grin/src/server.rs
+++ b/grin/src/server.rs
@@ -161,10 +161,16 @@ impl Server {
 			_ => {}
 		}
 
+		let skip_sync_wait = match config.skip_sync_wait {
+			None => false,
+			Some(b) => b,
+		};
+
 		sync::run_sync(
 			currently_syncing.clone(),
 			p2p_server.peers.clone(),
 			shared_chain.clone(),
+			skip_sync_wait,
 			);
 
 		evt_handle.spawn(p2p_server.start(evt_handle.clone()).map_err(|_| ()));
diff --git a/grin/src/sync.rs b/grin/src/sync.rs
index ce0a1b400..9a300da04 100644
--- a/grin/src/sync.rs
+++ b/grin/src/sync.rs
@@ -30,6 +30,7 @@ pub fn run_sync(
 	currently_syncing: Arc<AtomicBool>,
 	peers: p2p::Peers,
 	chain: Arc<chain::Chain>,
+	skip_sync_wait: bool,
 ) {
 
 	let chain = chain.clone();
@@ -40,7 +41,9 @@ pub fn run_sync(
 			let mut prev_header_sync = prev_body_sync.clone();
 
 			// initial sleep to give us time to peer with some nodes
-			thread::sleep(Duration::from_secs(30));
+			if !skip_sync_wait {
+				thread::sleep(Duration::from_secs(30));
+			}
 
 			loop {
 				let syncing = needs_syncing(
diff --git a/grin/src/types.rs b/grin/src/types.rs
index 04d232d28..c5a44ac4c 100644
--- a/grin/src/types.rs
+++ b/grin/src/types.rs
@@ -136,6 +136,10 @@ pub struct ServerConfig {
 	/// Transaction pool configuration
 	#[serde(default)]
 	pub pool_config: pool::PoolConfig,
+
+	/// Whether to skip the sync timeout on startup
+	/// (To assist testing on solo chains)
+	pub skip_sync_wait: Option<bool>,
 }
 
 impl Default for ServerConfig {
@@ -150,6 +154,7 @@ impl Default for ServerConfig {
 			mining_config: Some(pow::types::MinerConfig::default()),
 			chain_type: ChainTypes::default(),
 			pool_config: pool::PoolConfig::default(),
+			skip_sync_wait: Some(true),
 		}
 	}
 }
diff --git a/grin/tests/framework/mod.rs b/grin/tests/framework/mod.rs
index 9f5dca196..9931eb59c 100644
--- a/grin/tests/framework/mod.rs
+++ b/grin/tests/framework/mod.rs
@@ -34,12 +34,9 @@ use std::default::Default;
 use std::fs;
 use std::sync::{Arc, Mutex};
 
-use tokio_core::reactor;
-use tokio_timer::Timer;
+use self::tokio_core::reactor;
+use self::tokio_timer::Timer;
 
-use util::secp::Secp256k1;
-// TODO - why does this need self here? Missing something somewhere.
-use self::keychain::Keychain;
 use wallet::WalletConfig;
 
 /// Just removes all results from previous runs
@@ -158,7 +155,10 @@ pub struct LocalServerContainer {
 	pub peer_list: Vec<String>,
 
 	// base directory for the server instance
-	working_dir: String,
+	pub working_dir: String,
+
+	// Wallet configuration
+	pub wallet_config:WalletConfig,
 }
 
 impl LocalServerContainer {
@@ -168,6 +168,11 @@ impl LocalServerContainer {
 
 	pub fn new(config: LocalServerContainerConfig) -> Result<LocalServerContainer, Error> {
 		let working_dir = format!("target/test_servers/{}", config.name);
+		let mut wallet_config = WalletConfig::default();
+
+		wallet_config.api_listen_port = format!("{}", config.wallet_port);
+		wallet_config.check_node_api_http_addr = config.wallet_validating_node_url.clone();
+		wallet_config.data_file_dir = working_dir.clone();
 		Ok(
 			(LocalServerContainer {
 				config: config,
@@ -178,6 +183,7 @@ impl LocalServerContainer {
 				wallet_is_running: false,
 				working_dir: working_dir,
 				peer_list: Vec::new(),
+				wallet_config:wallet_config,
 			}),
 		)
 	}
@@ -206,6 +212,7 @@ impl LocalServerContainer {
 				seeds: Some(seeds),
 				seeding_type: seeding_type,
 				chain_type: core::global::ChainTypes::AutomatedTesting,
+				skip_sync_wait:Some(true),
 				..Default::default()
 			},
 			&event_loop.handle(),
@@ -260,52 +267,93 @@ impl LocalServerContainer {
 	/// Starts a wallet daemon to receive and returns the
 	/// listening server url
 
-	pub fn run_wallet(&mut self, _duration_in_seconds: u64) {
+	pub fn run_wallet(&mut self, _duration_in_mills: u64) {
 		// URL on which to start the wallet listener (i.e. api server)
-		let url = format!("{}:{}", self.config.base_addr, self.config.wallet_port);
+		let _url = format!("{}:{}", self.config.base_addr, self.config.wallet_port);
 
 		// Just use the name of the server for a seed for now
 		let seed = format!("{}", self.config.name);
 
-		let seed = blake2::blake2b::blake2b(32, &[], seed.as_bytes());
+		let _seed = blake2::blake2b::blake2b(32, &[], seed.as_bytes());
 
-		// TODO - just use from_random_seed here?
-		let keychain =
-			Keychain::from_seed(seed.as_bytes()).expect("Error initializing keychain from seed");
 
 		println!(
 			"Starting the Grin wallet receiving daemon on {} ",
 			self.config.wallet_port
 		);
 
-		let mut wallet_config = WalletConfig::default();
+		self.wallet_config = WalletConfig::default();
 
-		wallet_config.api_listen_port = format!("{}", self.config.wallet_port);
-		wallet_config.check_node_api_http_addr = self.config.wallet_validating_node_url.clone();
-		wallet_config.data_file_dir = self.working_dir.clone();
+		self.wallet_config.api_listen_port = format!("{}", self.config.wallet_port);
+		self.wallet_config.check_node_api_http_addr = self.config.wallet_validating_node_url.clone();
+		self.wallet_config.data_file_dir = self.working_dir.clone();
 
-		let receive_tx_handler = wallet::WalletReceiver {
-			config: wallet_config.clone(),
-			keychain: keychain.clone(),
-		};
-		let router = router!(
-			receive_tx: get "/receive/transaction" => receive_tx_handler,
+		let _=fs::create_dir_all(self.wallet_config.clone().data_file_dir);
+		wallet::WalletSeed::init_file(&self.wallet_config);
+
+		let wallet_seed =
+			wallet::WalletSeed::from_file(&self.wallet_config).expect("Failed to read wallet seed file.");
+
+		let keychain = wallet_seed.derive_keychain("grin_test").expect(
+			"Failed to derive keychain from seed file and passphrase.",
 		);
 
-		let mut api_server = api::ApiServer::new("/v1".to_string());
-		api_server.register_handler(router);
-		api_server.start(url).unwrap_or_else(|e| {
-			println!("Failed to start Grin wallet receiver: {}.", e);
-		});
-
-		self.api_server = Some(api_server);
+		wallet::server::start_rest_apis(self.wallet_config.clone(), keychain);
 		self.wallet_is_running = true;
 	}
 
-	/// Stops the running wallet server
 
+	pub fn send_amount_to(config: &WalletConfig,
+		amount:&str,
+		minimum_confirmations: u64,
+		selection_strategy:&str,
+		dest: &str){
+
+		let amount = core::core::amount_from_hr_string(amount).expect(
+			"Could not parse amount as a number with optional decimal point.",
+		);
+
+		let wallet_seed =
+			wallet::WalletSeed::from_file(config).expect("Failed to read wallet seed file.");
+
+		let mut keychain = wallet_seed.derive_keychain("grin_test").expect(
+			"Failed to derive keychain from seed file and passphrase.",
+		);
+		let max_outputs = 500;
+		let result = wallet::issue_send_tx(
+			config,
+			&mut keychain,
+			amount,
+			minimum_confirmations,
+			dest.to_string(),
+			max_outputs,
+			(selection_strategy == "all"),
+			);
+		match result {
+			Ok(_) => {
+				println!(
+					"Tx sent: {} grin to {} (strategy '{}')",
+					core::core::amount_to_hr_string(amount),
+					dest,
+					selection_strategy,
+				)
+			}
+			Err(wallet::Error::NotEnoughFunds(available)) => {
+				println!(
+					"Tx not sent: insufficient funds (max: {})",
+					core::core::amount_to_hr_string(available),
+				);
+			}
+			Err(e) => {
+				println!("Tx not sent to {}: {:?}", dest, e);
+			}
+		};
+	}
+ 
+	/// Stops the running wallet server
 	pub fn stop_wallet(&mut self) {
-		let mut api_server = self.api_server.as_mut().unwrap();
+		println!("Stop wallet!");
+		let api_server = self.api_server.as_mut().unwrap();
 		api_server.stop();
 	}
 
@@ -497,8 +545,8 @@ impl LocalServerContainerPool {
 	}
 
 	pub fn connect_all_peers(&mut self) {
-		/// just pull out all currently active servers, build a list,
-		/// and feed into all servers
+		// just pull out all currently active servers, build a list,
+		// and feed into all servers
 		let mut server_addresses: Vec<String> = Vec::new();
 		for s in &self.server_containers {
 			let server_address = format!("{}:{}", s.config.base_addr, s.config.p2p_server_port);
diff --git a/grin/tests/simulnet.rs b/grin/tests/simulnet.rs
index 662759fdd..87c93def6 100644
--- a/grin/tests/simulnet.rs
+++ b/grin/tests/simulnet.rs
@@ -12,9 +12,6 @@
 // See the License for the specific language governing permissions and
 // limitations under the License.
 
-#[macro_use]
-extern crate router;
-
 extern crate grin_api as api;
 extern crate grin_chain as chain;
 extern crate grin_core as core;
@@ -37,20 +34,18 @@ use std::default::Default;
 use futures::{Async, Future, Poll};
 use futures::task::current;
 use tokio_core::reactor;
-use tokio_timer::Timer;
 
-use core::consensus;
 use core::global;
 use core::global::ChainTypes;
-use wallet::WalletConfig;
 
-use framework::{LocalServerContainer, LocalServerContainerConfig, LocalServerContainerPool,
+use framework::{LocalServerContainerConfig, LocalServerContainerPool,
                 LocalServerContainerPoolConfig};
 
 /// Testing the frameworks by starting a fresh server, creating a genesis
 /// Block and mining into a wallet for a bit
 #[test]
 fn basic_genesis_mine() {
+	util::init_test_logger();
 	global::set_mining_mode(ChainTypes::AutomatedTesting);
 
 	let test_name_dir = "genesis_mine";
@@ -70,7 +65,8 @@ fn basic_genesis_mine() {
 	// Create a server to add into the pool
 	let mut server_config = LocalServerContainerConfig::default();
 	server_config.start_miner = true;
-	server_config.start_wallet = true;
+	server_config.start_wallet = false;
+	server_config.burn_mining_rewards = true;
 
 	pool.create_server(&mut server_config);
 	pool.run_all_servers();
@@ -100,7 +96,8 @@ fn simulate_seeding() {
 	// Create a first seed server to add into the pool
 	let mut server_config = LocalServerContainerConfig::default();
 	// server_config.start_miner = true;
-	server_config.start_wallet = true;
+	server_config.start_wallet = false;
+	server_config.burn_mining_rewards = true;
 	server_config.is_seeding = true;
 
 	pool.create_server(&mut server_config);
@@ -279,7 +276,7 @@ fn simulate_full_sync() {
 	// instantiates 2 servers on different ports
 	let mut servers = vec![];
 	for n in 0..2 {
-		let mut config = grin::ServerConfig {
+		let config = grin::ServerConfig {
 			api_http_addr: format!("127.0.0.1:{}", 19000 + n),
 			db_root: format!("target/{}/grin-sync-{}", test_name_dir, n),
 			p2p_config: Some(p2p::P2PConfig {
diff --git a/grin/tests/wallet.rs b/grin/tests/wallet.rs
new file mode 100644
index 000000000..095ae247f
--- /dev/null
+++ b/grin/tests/wallet.rs
@@ -0,0 +1,113 @@
+// Copyright 2017 The Grin Developers
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//     http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+
+#[macro_use]
+extern crate router;
+#[macro_use]
+extern crate slog;
+
+extern crate grin_api as api;
+extern crate grin_chain as chain;
+extern crate grin_core as core;
+extern crate grin_grin as grin;
+extern crate grin_p2p as p2p;
+extern crate grin_pow as pow;
+extern crate grin_util as util;
+extern crate grin_wallet as wallet;
+extern crate grin_config as config;
+
+mod framework;
+
+use std::{thread, time};
+use std::sync::{Arc, Mutex};
+use framework::{LocalServerContainer,
+	LocalServerContainerConfig,
+	LocalServerContainerPoolConfig};
+
+use util::{init_logger, LOGGER};
+
+/// Start 1 node mining and two wallets, then send a few
+/// transactions from one to the other
+#[test]
+fn basic_wallet_transactions() {
+	let test_name_dir = "test_servers";
+	core::global::set_mining_mode(core::global::ChainTypes::AutomatedTesting);
+	framework::clean_all_output(test_name_dir);
+	let mut log_config = util::LoggingConfig::default();
+	//log_config.stdout_log_level = util::LogLevel::Trace;
+	log_config.stdout_log_level = util::LogLevel::Info;
+	//init_logger(Some(log_config));
+	util::init_test_logger();
+
+	// Run a separate coinbase wallet for coinbase transactions
+	let mut coinbase_config = LocalServerContainerConfig::default();
+	coinbase_config.name = String::from("coinbase_wallet");
+	coinbase_config.wallet_validating_node_url=String::from("http://127.0.0.1:30001");
+	coinbase_config.wallet_port = 10002;
+	let coinbase_wallet = Arc::new(Mutex::new(LocalServerContainer::new(coinbase_config).unwrap()));
+	let coinbase_wallet_config = {
+		coinbase_wallet.lock().unwrap().wallet_config.clone()
+	};
+
+	let _ = thread::spawn(move || {
+		let mut w = coinbase_wallet.lock().unwrap();
+		w.run_wallet(0);
+	});
+
+	let mut recp_config = LocalServerContainerConfig::default();
+	recp_config.name = String::from("target_wallet");
+	recp_config.wallet_validating_node_url=String::from("http://127.0.0.1:30001");
+	recp_config.wallet_port = 20002;
+	let target_wallet = Arc::new(Mutex::new(LocalServerContainer::new(recp_config).unwrap()));
+	let target_wallet_cloned = target_wallet.clone();
+	let recp_wallet_config = {
+		target_wallet.lock().unwrap().wallet_config.clone()
+	};
+
+	//Start up a second wallet, to receive
+	let _ = thread::spawn(move || {
+		let mut w = target_wallet_cloned.lock().unwrap();
+		w.run_wallet(0);
+	});
+
+	// Spawn server and let it run for a bit
+	let _ = thread::spawn(move || {
+		let mut server_config = LocalServerContainerConfig::default();
+		server_config.name = String::from("server_one");
+		server_config.p2p_server_port = 30000;
+		server_config.api_server_port = 30001;
+		server_config.start_miner = true;
+		server_config.start_wallet = false;
+		server_config.coinbase_wallet_address = String::from(format!(
+			"http://{}:{}",
+			server_config.base_addr,
+			10002
+		));
+		let mut server_one = LocalServerContainer::new(server_config).unwrap();
+		server_one.run_server(120);
+	});
+
+	//Wait for chain to build
+	thread::sleep(time::Duration::from_millis(5000));
+	warn!(LOGGER, "Sending 50 Grins to recipient wallet");
+	LocalServerContainer::send_amount_to(&coinbase_wallet_config, "50.00", 1, "all", "http://127.0.0.1:20002");
+
+	//let some more mining happen, make sure nothing pukes
+	thread::sleep(time::Duration::from_millis(5000));
+
+	//send some cash right back
+	LocalServerContainer::send_amount_to(&recp_wallet_config, "25.00", 1, "all", "http://127.0.0.1:10002");
+	thread::sleep(time::Duration::from_millis(5000));
+}
+
diff --git a/keychain/src/keychain.rs b/keychain/src/keychain.rs
index 678e6f931..007248fa5 100644
--- a/keychain/src/keychain.rs
+++ b/keychain/src/keychain.rs
@@ -18,14 +18,15 @@ use std::sync::{Arc, RwLock};
 
 use util::secp;
 use util::secp::{Message, Secp256k1, Signature};
-use util::secp::key::SecretKey;
+use util::secp::key::{SecretKey, PublicKey};
 use util::secp::pedersen::{Commitment, ProofMessage, ProofInfo, RangeProof};
+use util::secp::aggsig;
 use util::logger::LOGGER;
+use util::kernel_sig_msg;
 use blake2;
 use blind::{BlindSum, BlindingFactor};
 use extkey::{self, Identifier};
 
-
 #[derive(PartialEq, Eq, Clone, Debug)]
 pub enum Error {
 	ExtendedKey(extkey::Error),
@@ -45,10 +46,23 @@ impl From<extkey::Error> for Error {
 	}
 }
 
+/// Holds internal information about an aggsig operation
+#[derive(Clone, Debug)]
+pub struct AggSigTxContext {
+	// Secret key (of which public is shared)
+	pub sec_key: SecretKey,
+	// Secret nonce (of which public is shared)
+	// (basically a SecretKey)
+	pub sec_nonce: SecretKey,
+	// If I'm the recipient, store my outputs between invocations (that I need to sum)
+	pub output_ids: Vec<Identifier>,
+}
+
 #[derive(Clone, Debug)]
 pub struct Keychain {
 	secp: Secp256k1,
 	extkey: extkey::ExtendedKey,
+	pub aggsig_context: Arc<RwLock<Option<AggSigTxContext>>>,
 	key_overrides: HashMap<Identifier, SecretKey>,
 	key_derivation_cache: Arc<RwLock<HashMap<Identifier, u32>>>,
 }
@@ -77,6 +91,7 @@ impl Keychain {
 		let keychain = Keychain {
 			secp: secp,
 			extkey: extkey,
+			aggsig_context: Arc::new(RwLock::new(None)),
 			key_overrides: HashMap::new(),
 			key_derivation_cache: Arc::new(RwLock::new(HashMap::new())),
 		};
@@ -232,6 +247,138 @@ impl Keychain {
 		Ok(BlindingFactor::new(blinding))
 	}
 
+	pub fn aggsig_create_context(&self, sec_key:SecretKey) {
+		let mut context = self.aggsig_context.write().unwrap();
+		*context = Some(AggSigTxContext{
+			sec_key: sec_key,
+			sec_nonce: aggsig::export_secnonce_single(&self.secp).unwrap(),
+			output_ids: vec![],
+		});
+	}
+
+	/// Tracks an output contributing to my excess value (if it needs to
+	/// be kept between invocations
+	pub fn aggsig_add_output(&self, id: &Identifier){
+		let mut agg_context=self.aggsig_context.write().unwrap();
+		let agg_context_write=agg_context.as_mut().unwrap();
+		agg_context_write.output_ids.push(id.clone());
+	}
+
+	/// Returns all stored outputs
+	pub fn aggsig_get_outputs(&self) -> Vec<Identifier> {
+		let context = self.aggsig_context.clone();
+		let context_read=context.read().unwrap();
+		let agg_context=context_read.as_ref().unwrap();
+		agg_context.output_ids.clone()
+	}
+
+	/// Returns private key, private nonce
+	pub fn aggsig_get_private_keys(&self) -> (SecretKey, SecretKey) {
+		let context = self.aggsig_context.clone();
+		let context_read=context.read().unwrap();
+		let agg_context=context_read.as_ref().unwrap();
+		(agg_context.sec_key.clone(),
+		agg_context.sec_nonce.clone())
+	}
+
+	/// Returns public key, public nonce
+	pub fn aggsig_get_public_keys(&self) -> (PublicKey, PublicKey) {
+		let context = self.aggsig_context.clone();
+		let context_read=context.read().unwrap();
+		let agg_context=context_read.as_ref().unwrap();
+		(PublicKey::from_secret_key(&self.secp, &agg_context.sec_key).unwrap(),
+		PublicKey::from_secret_key(&self.secp, &agg_context.sec_nonce).unwrap())
+	}
+
+	/// Note 'secnonce' here is used to perform the signature, while 'pubnonce' just allows you to
+	/// provide a custom public nonce to include while calculating e
+	/// nonce_sum is the sum used to decide whether secnonce should be inverted during sig time
+	pub fn aggsig_sign_single(&self, msg: &Message, secnonce:Option<&SecretKey>, pubnonce: Option<&PublicKey>, nonce_sum: Option<&PublicKey>) -> Result<Signature, Error> {
+		let context = self.aggsig_context.clone();
+		let context_read=context.read().unwrap();
+		let agg_context=context_read.as_ref().unwrap();
+		let sig = aggsig::sign_single(&self.secp, msg, &agg_context.sec_key, secnonce, pubnonce, nonce_sum)?;
+		Ok(sig)
+	}
+
+	//Verifies an aggsig signature
+	pub fn aggsig_verify_single(&self, sig: &Signature, msg: &Message, pubnonce:Option<&PublicKey>, pubkey:&PublicKey, is_partial:bool) -> bool {
+		aggsig::verify_single(&self.secp, sig, msg, pubnonce, pubkey, is_partial)
+	}
+
+	//Verifies other final sig corresponds with what we're expecting
+	pub fn aggsig_verify_final_sig_build_msg(&self, sig: &Signature, pubkey: &PublicKey, fee: u64, lock_height:u64) -> bool {
+		let msg = secp::Message::from_slice(&kernel_sig_msg(fee, lock_height)).unwrap();
+		self.aggsig_verify_single(sig, &msg, None, pubkey, true)
+	}
+
+	//Verifies other party's sig corresponds with what we're expecting
+	pub fn aggsig_verify_partial_sig(&self, sig: &Signature, other_pub_nonce:&PublicKey, pubkey:&PublicKey, fee: u64, lock_height:u64) -> bool {
+		let (_, sec_nonce) = self.aggsig_get_private_keys();
+		let mut nonce_sum = other_pub_nonce.clone();
+		let _ = nonce_sum.add_exp_assign(&self.secp, &sec_nonce);
+		let msg = secp::Message::from_slice(&kernel_sig_msg(fee, lock_height)).unwrap();
+
+		self.aggsig_verify_single(sig, &msg, Some(&nonce_sum), pubkey, true)
+	}
+
+	pub fn aggsig_calculate_partial_sig(&self, other_pub_nonce:&PublicKey, fee:u64, lock_height:u64) -> Result<Signature, Error>{
+		// Add public nonces kR*G + kS*G
+		let (_, sec_nonce) = self.aggsig_get_private_keys();
+		let mut nonce_sum = other_pub_nonce.clone();
+		let _ = nonce_sum.add_exp_assign(&self.secp, &sec_nonce);
+		let msg = secp::Message::from_slice(&kernel_sig_msg(fee, lock_height))?;
+
+		//Now calculate signature using message M=fee, nonce in e=nonce_sum
+		self.aggsig_sign_single(&msg, Some(&sec_nonce), Some(&nonce_sum), Some(&nonce_sum))
+	}
+
+	/// Helper function to calculate final singature
+	pub fn aggsig_calculate_final_sig(&self, their_sig: &Signature, our_sig: &Signature, their_pub_nonce: &PublicKey) -> Result<Signature, Error> {
+		// Add public nonces kR*G + kS*G
+		let (_, sec_nonce) = self.aggsig_get_private_keys();
+		let mut nonce_sum = their_pub_nonce.clone();
+		let _ = nonce_sum.add_exp_assign(&self.secp, &sec_nonce);
+		let sig = aggsig::add_signatures_single(&self.secp, their_sig, our_sig, &nonce_sum)?;
+		Ok(sig)
+	}
+
+	/// Helper function to calculate final public key 
+	pub fn aggsig_calculate_final_pubkey(&self, their_public_key: &PublicKey) -> Result<PublicKey, Error> {
+		let (our_sec_key, _) = self.aggsig_get_private_keys();
+		let mut pk_sum = their_public_key.clone();
+		let _ = pk_sum.add_exp_assign(&self.secp, &our_sec_key);
+		Ok(pk_sum)
+	}
+
+	/// Just a simple sig, creates its own nonce, etc
+	pub fn aggsig_sign_from_key_id(&self, msg: &Message, key_id: &Identifier) -> Result<Signature, Error> {
+		let skey = self.derived_key(key_id)?;
+		let sig = aggsig::sign_single(&self.secp, &msg, &skey, None, None, None)?;
+		Ok(sig)
+	}
+
+	/// Verifies a sig given a commitment
+	pub fn aggsig_verify_single_from_commit(secp:&Secp256k1, sig: &Signature, msg: &Message, commit:&Commitment) -> bool {
+		// Extract the pubkey, unfortunately we need this hack for now, (we just hope one is valid)
+		// TODO: Create better secp256k1 API to do this
+		let pubkeys = commit.to_two_pubkeys(secp);
+		let mut valid=false;
+		for i in 0..pubkeys.len() {
+			valid=aggsig::verify_single(secp, &sig, &msg, None, &pubkeys[i], false);
+			if valid {
+				break;
+			}
+		}
+		valid
+	}
+
+	/// Just a simple sig, creates its own nonce, etc
+	pub fn aggsig_sign_with_blinding(secp:&Secp256k1, msg: &Message, blinding:&BlindingFactor) -> Result<Signature, Error> {
+		let sig = aggsig::sign_single(secp, &msg, &blinding.secret_key(), None, None, None)?;
+		Ok(sig)
+	}
+
 	pub fn sign(&self, msg: &Message, key_id: &Identifier) -> Result<Signature, Error> {
 		let skey = self.derived_key(key_id)?;
 		let sig = self.secp.sign(msg, &skey)?;
diff --git a/keychain/src/lib.rs b/keychain/src/lib.rs
index 9e19d2a4c..989c941bd 100644
--- a/keychain/src/lib.rs
+++ b/keychain/src/lib.rs
@@ -31,4 +31,4 @@ mod extkey;
 pub use blind::{BlindSum, BlindingFactor};
 pub use extkey::{ExtendedKey, Identifier, IDENTIFIER_SIZE};
 pub mod keychain;
-pub use keychain::{Error, Keychain};
+pub use keychain::{Error, Keychain, AggSigTxContext};
diff --git a/pool/src/pool.rs b/pool/src/pool.rs
index 059724177..08d6edab7 100644
--- a/pool/src/pool.rs
+++ b/pool/src/pool.rs
@@ -737,7 +737,7 @@ mod tests {
    // a valid transaction.
 			let valid_transaction = test_transaction(vec![5, 6], vec![9]);
 
-			match write_pool.add_to_memory_pool(test_source(), valid_transaction) {
+			match write_pool.add_to_memory_pool(test_source(), valid_transaction.clone()) {
 				Ok(_) => {}
 				Err(x) => panic!("Unexpected error while adding a valid transaction: {:?}", x),
 			};
@@ -764,9 +764,15 @@ mod tests {
 				}
 			};
 
-			let already_in_pool = test_transaction(vec![5, 6], vec![9]);
+			// Note, this used to work as expected, but after aggsig implementation
+			// creating another transaction with the same inputs/outputs doesn't create
+			// the same hash ID due to the random nonces in an aggsig. This
+			// will instead throw a (correct as well) Already spent error. An AlreadyInPool
+			// error can only come up in the case of the exact same transaction being
+			// added
+			//let already_in_pool = test_transaction(vec![5, 6], vec![9]);
 
-			match write_pool.add_to_memory_pool(test_source(), already_in_pool) {
+			match write_pool.add_to_memory_pool(test_source(), valid_transaction) {
 				Ok(_) => panic!("Expected error when adding already in pool, got Ok"),
 				Err(x) => {
 					match x {
diff --git a/src/bin/grin.rs b/src/bin/grin.rs
index 8fd8c783d..df67be01e 100644
--- a/src/bin/grin.rs
+++ b/src/bin/grin.rs
@@ -33,8 +33,6 @@ extern crate grin_wallet as wallet;
 mod client;
 
 use std::thread;
-use std::io::Read;
-use std::fs::File;
 use std::time::Duration;
 use std::env::current_dir;
 
@@ -211,10 +209,8 @@ fn main() {
 				.takes_value(true)))
 
 		.subcommand(SubCommand::with_name("send")
-			.about("Builds a transaction to send someone some coins. By default, \
-				the transaction will just be printed to stdout. If a destination is \
-				provided, the command will attempt to contact the receiver at that \
-				address and send the transaction directly.")
+			.about("Builds a transaction to send coins and sends it to the specified \
+			 listener directly.")
 			.arg(Arg::with_name("amount")
 				.help("Number of coins to send with optional fraction, e.g. 12.423")
 				.index(1))
@@ -417,7 +413,7 @@ fn wallet_command(wallet_args: &ArgMatches, global_config: GlobalConfig) {
 	let passphrase = wallet_args.value_of("pass").expect(
 		"Failed to read passphrase.",
 	);
-	let keychain = wallet_seed.derive_keychain(&passphrase).expect(
+	let mut keychain = wallet_seed.derive_keychain(&passphrase).expect(
 		"Failed to derive keychain from seed file and passphrase.",
 	);
 
@@ -428,7 +424,9 @@ fn wallet_command(wallet_args: &ArgMatches, global_config: GlobalConfig) {
 			}
 			wallet::server::start_rest_apis(wallet_config, keychain);
 		}
-		("receive", Some(receive_args)) => {
+		// The following is gone for now, as a result of aggsig transactions
+		// being implemented
+		/*("receive", Some(receive_args)) => {
 			let input = receive_args.value_of("input").expect("Input file required");
 			let mut file = File::open(input).expect("Unable to open transaction file.");
 			let mut contents = String::new();
@@ -444,7 +442,7 @@ fn wallet_command(wallet_args: &ArgMatches, global_config: GlobalConfig) {
 				println!(" * your node isn't running or can't be reached");
 				println!("\nDetailed error: {:?}", e);
 			}
-		}
+		}*/
 		("send", Some(send_args)) => {
 			let amount = send_args.value_of("amount").expect(
 				"Amount to send required",
@@ -461,14 +459,13 @@ fn wallet_command(wallet_args: &ArgMatches, global_config: GlobalConfig) {
 			let selection_strategy = send_args.value_of("selection_strategy").expect(
 				"Selection strategy required",
 			);
-			let mut dest = "stdout";
-			if let Some(d) = send_args.value_of("dest") {
-				dest = d;
-			}
+			let dest =  send_args.value_of("dest").expect(
+				"Destination wallet address required",
+			);
 			let max_outputs = 500;
 			let result = wallet::issue_send_tx(
 				&wallet_config,
-				&keychain,
+				&mut keychain,
 				amount,
 				minimum_confirmations,
 				dest.to_string(),
diff --git a/util/Cargo.toml b/util/Cargo.toml
index f8409b4bb..8d6ef53da 100644
--- a/util/Cargo.toml
+++ b/util/Cargo.toml
@@ -10,8 +10,10 @@ slog = { version = "^2.0.12", features = ["max_level_trace", "release_max_level_
 slog-term = "^2.2.0"
 slog-async = "^2.1.0"
 lazy_static = "~0.2.8"
+byteorder = "^0.5"
 rand = "0.3"
 serde = "~1.0.8"
 serde_derive = "~1.0.8"
-secp256k1zkp = { git = "https://github.com/mimblewimble/rust-secp256k1-zkp", tag="grin_integration_2" }
+secp256k1zkp = { git = "https://github.com/mimblewimble/rust-secp256k1-zkp", tag="grin_integration_6" }
+#secp256k1zkp = { path = "../../rust-secp256k1-zkp" }
 
diff --git a/util/src/lib.rs b/util/src/lib.rs
index 65180c414..30b921b69 100644
--- a/util/src/lib.rs
+++ b/util/src/lib.rs
@@ -25,7 +25,7 @@
 extern crate slog;
 extern crate slog_async;
 extern crate slog_term;
-
+extern crate byteorder;
 extern crate rand;
 
 #[macro_use]
@@ -48,12 +48,13 @@ pub mod secp_static;
 pub use secp_static::static_secp_instance;
 
 pub mod types;
-pub use types::LoggingConfig;
+pub use types::{LoggingConfig, LogLevel};
 
 // other utils
 use std::cell::{Ref, RefCell};
 #[allow(unused_imports)]
 use std::ops::Deref;
+use byteorder::{BigEndian, ByteOrder};
 
 mod hex;
 pub use hex::*;
@@ -98,3 +99,11 @@ impl<T> OneTime<T> {
 		Ref::map(self.inner.borrow(), |o| o.as_ref().unwrap())
 	}
 }
+
+/// Construct msg bytes from tx fee and lock_height
+pub fn kernel_sig_msg(fee: u64, lock_height: u64) -> [u8; 32] {
+	let mut bytes = [0; 32];
+	BigEndian::write_u64(&mut bytes[16..24], fee);
+	BigEndian::write_u64(&mut bytes[24..], lock_height);
+	bytes
+}
diff --git a/wallet/src/client.rs b/wallet/src/client.rs
index 4976a1f40..b60e23257 100644
--- a/wallet/src/client.rs
+++ b/wallet/src/client.rs
@@ -56,11 +56,11 @@ where
 	Ok(res)
 }
 
-pub fn send_partial_tx(url: &str, partial_tx: &PartialTx) -> Result<(), Error> {
+pub fn send_partial_tx(url: &str, partial_tx: &PartialTx) -> Result<PartialTx, Error> {
 	single_send_partial_tx(url, partial_tx)
 }
 
-fn single_send_partial_tx(url: &str, partial_tx: &PartialTx) -> Result<(), Error> {
+fn single_send_partial_tx(url: &str, partial_tx: &PartialTx) -> Result<PartialTx, Error> {
 	let mut core = reactor::Core::new()?;
 	let client = hyper::Client::new(&core.handle());
 
@@ -69,21 +69,15 @@ fn single_send_partial_tx(url: &str, partial_tx: &PartialTx) -> Result<(), Error
 	let json = serde_json::to_string(&partial_tx)?;
 	req.set_body(json);
 
-	let work = client.request(req);
-	let _ = core.run(work).and_then(|res| {
-		if res.status() == hyper::StatusCode::Ok {
-			info!(LOGGER, "Transaction sent successfully");
-		} else {
-			error!(
-				LOGGER,
-				"Error sending transaction - status: {}",
-				res.status()
-			);
-			return Err(hyper::Error::Status);
-		}
-		Ok(())
-	})?;
-	Ok(())
+	let work = client.request(req).and_then(|res| {
+		res.body().concat2().and_then(move |body| {
+			let partial_tx: PartialTx =
+				serde_json::from_slice(&body).map_err(|e| io::Error::new(io::ErrorKind::Other, e))?;
+			Ok(partial_tx)
+		})
+	});
+	let res = core.run(work)?;
+	Ok(res)
 }
 
 /// Makes a single request to the wallet API to create a new coinbase output.
diff --git a/wallet/src/lib.rs b/wallet/src/lib.rs
index 3ae486d2f..6054c77eb 100644
--- a/wallet/src/lib.rs
+++ b/wallet/src/lib.rs
@@ -54,7 +54,7 @@ pub mod server;
 
 pub use outputs::show_outputs;
 pub use info::show_info;
-pub use receiver::{receive_json_tx, receive_json_tx_str, WalletReceiver};
+pub use receiver::{WalletReceiver};
 pub use sender::{issue_burn_tx, issue_send_tx};
 pub use types::{BlockFees, CbData, Error, WalletConfig, WalletReceiveRequest, WalletSeed};
 pub use restore::restore;
diff --git a/wallet/src/receiver.rs b/wallet/src/receiver.rs
index 76e64b542..18a5d5c0b 100644
--- a/wallet/src/receiver.rs
+++ b/wallet/src/receiver.rs
@@ -26,10 +26,9 @@ use api;
 use core::consensus::reward;
 use core::core::{build, Block, Output, Transaction, TxKernel};
 use core::ser;
-use keychain::{BlindingFactor, Identifier, Keychain};
+use keychain::{Identifier, Keychain};
 use types::*;
-use util;
-use util::LOGGER;
+use util::{LOGGER, to_hex, secp};
 
 /// Dummy wrapper for the hex-encoded serialized transaction.
 #[derive(Serialize, Deserialize)]
@@ -37,41 +36,136 @@ pub struct TxWrapper {
 	pub tx_hex: String,
 }
 
-pub fn receive_json_tx_str(
+/// Receive Part 1 of interactive transactions from sender, Sender Initiation
+/// Return result of part 2, Recipient Initation, to sender
+/// -Receiver receives inputs, outputs xS * G and kS * G
+/// -Receiver picks random blinding factors for all outputs being received, computes total blinding
+///     excess xR
+/// -Receiver picks random nonce kR
+/// -Receiver computes Schnorr challenge e = H(M | kR * G + kS * G)
+/// -Receiver computes their part of signature, sR = kR + e * xR
+/// -Receiver responds with sR, blinding excess xR * G, public nonce kR * G
+
+fn handle_sender_initiation(
 	config: &WalletConfig,
 	keychain: &Keychain,
-	json_tx: &str,
-) -> Result<(), Error> {
-	let partial_tx = serde_json::from_str(json_tx).unwrap();
-	receive_json_tx(config, keychain, &partial_tx)
+	partial_tx: &PartialTx
+) -> Result<PartialTx, Error> {
+	let (amount, _sender_pub_blinding, sender_pub_nonce, _sig, tx) = read_partial_tx(keychain, partial_tx)?;
+
+	let root_key_id = keychain.root_key_id();
+
+	// double check the fee amount included in the partial tx
+	// we don't necessarily want to just trust the sender
+	// we could just overwrite the fee here (but we won't) due to the ecdsa sig
+	let fee = tx_fee(tx.inputs.len(), tx.outputs.len() + 1, None);
+	if fee != tx.fee {
+		return Err(Error::FeeDispute {
+			sender_fee: tx.fee,
+			recipient_fee: fee,
+		});
+	}
+
+	let out_amount = amount - fee;
+
+	//First step is just to get the excess sum of the outputs we're participating in
+	//Output and key needs to be stored until transaction finalisation time, somehow
+
+	let key_id = WalletData::with_wallet(&config.data_file_dir, |wallet_data| {
+		let (key_id, derivation) = next_available_key(&wallet_data, keychain);
+
+		wallet_data.add_output(OutputData {
+			root_key_id: root_key_id.clone(),
+			key_id: key_id.clone(),
+			n_child: derivation,
+			value: out_amount,
+			status: OutputStatus::Unconfirmed,
+			height: 0,
+			lock_height: 0,
+			is_coinbase: false,
+		});
+
+		key_id
+	})?;
+
+	// Still handy for getting the blinding sum
+	let (_, blind_sum) = build::transaction(
+		vec![
+			build::output(out_amount, key_id.clone()),
+		],
+		keychain,
+	)?;
+
+	warn!(LOGGER, "Creating new aggsig context");
+	// Create a new aggsig context
+	// this will create a new blinding sum and nonce, and store them
+	keychain.aggsig_create_context(blind_sum.secret_key());
+	keychain.aggsig_add_output(&key_id);
+
+	let sig_part=keychain.aggsig_calculate_partial_sig(&sender_pub_nonce, fee, tx.lock_height).unwrap();
+
+	// Build the response, which should contain sR, blinding excess xR * G, public nonce kR * G
+	let mut partial_tx = build_partial_tx(keychain, amount, Some(sig_part), tx);
+	partial_tx.phase = PartialTxPhase::ReceiverInitiation;
+
+	Ok(partial_tx)
 }
 
-/// Receive an already well formed JSON transaction issuance and finalize the
-/// transaction, adding our receiving output, to broadcast to the rest of the
-/// network.
-pub fn receive_json_tx(
+/// Receive Part 3 of interactive transactions from sender, Sender Confirmation
+/// Return Ok/Error
+/// -Receiver receives sS
+/// -Receiver verifies sender's sig, by verifying that kS * G + e *xS * G = sS * G
+/// -Receiver calculates final sig as s=(sS+sR, kS * G+kR * G)
+/// -Receiver puts into TX kernel:
+///
+/// Signature S
+/// pubkey xR * G+xS * G
+/// fee (= M)
+/// -Receiver sends completed TX to mempool. responds OK to sender
+
+fn handle_sender_confirmation(
 	config: &WalletConfig,
 	keychain: &Keychain,
-	partial_tx: &PartialTx,
-) -> Result<(), Error> {
+	partial_tx: &PartialTx
+) -> Result<PartialTx, Error> {
+	let (amount, sender_pub_blinding, sender_pub_nonce, sender_sig_part, tx) = read_partial_tx(keychain, partial_tx)?;
+	let sender_sig_part=sender_sig_part.unwrap();
+	let res = keychain.aggsig_verify_partial_sig(&sender_sig_part, &sender_pub_nonce, &sender_pub_blinding, tx.fee, tx.lock_height);
 
-	// reading the partial transaction and finalizing it, adding our output
-	let (amount, blinding, tx) = read_partial_tx(keychain, partial_tx)?;
-	let (final_tx, key_id) = receive_transaction(config, keychain, amount, blinding, tx)?;
-	let tx_hex = util::to_hex(ser::ser_vec(&final_tx).unwrap());
-
-	// pushing to the transaction pool, in case of error the output that was
-	// reserved needs to be removed
-	let url = format!("{}/v1/pool/push", config.check_node_api_http_addr.as_str());
-	let res = api::client::post(url.as_str(), &TxWrapper { tx_hex: tx_hex });
-	if let Err(e) = res {
-		WalletData::with_wallet(&config.data_file_dir, |wallet_data| {
-			wallet_data.delete_output(&key_id);
-		})?;
-		Err(Error::Node(e))
-	} else {
-		Ok(())
+	if !res {
+		error!(LOGGER, "Partial Sig from sender invalid.");
+		return Err(Error::Signature(String::from("Partial Sig from sender invalid.")));
 	}
+
+	//Just calculate our sig part again instead of storing
+	let our_sig_part=keychain.aggsig_calculate_partial_sig(&sender_pub_nonce, tx.fee, tx.lock_height).unwrap();
+
+	// And the final signature
+	let final_sig=keychain.aggsig_calculate_final_sig(&sender_sig_part, &our_sig_part, &sender_pub_nonce).unwrap();
+
+	// Calculate the final public key (for our own sanity check)
+	let final_pubkey=keychain.aggsig_calculate_final_pubkey(&sender_pub_blinding).unwrap();
+
+	//Check our final sig verifies
+	let res = keychain.aggsig_verify_final_sig_build_msg(&final_sig, &final_pubkey, tx.fee, tx.lock_height);
+
+	if !res {
+		error!(LOGGER, "Final aggregated signature invalid.");
+		return Err(Error::Signature(String::from("Final aggregated signature invalid.")));
+	}
+
+
+	let final_tx = build_final_transaction(config, keychain, amount, &final_sig, tx.clone())?;
+	let tx_hex = to_hex(ser::ser_vec(&final_tx).unwrap());
+
+	let url = format!("{}/v1/pool/push", config.check_node_api_http_addr.as_str());
+	api::client::post(url.as_str(), &TxWrapper { tx_hex: tx_hex })
+		.map_err(|e| Error::Node(e))?;
+
+	// Return what we've actually posted
+	let mut partial_tx = build_partial_tx(keychain, amount, Some(final_sig), tx);
+	partial_tx.phase = PartialTxPhase::ReceiverConfirmation;
+	Ok(partial_tx)
 }
 
 /// Component used to receive coins, implements all the receiving end of the
@@ -87,14 +181,34 @@ impl Handler for WalletReceiver {
 		let struct_body = req.get::<bodyparser::Struct<PartialTx>>();
 
 		if let Ok(Some(partial_tx)) = struct_body {
-			receive_json_tx(&self.config, &self.keychain, &partial_tx)
-				.map_err(|e| {
-					error!(LOGGER, "Problematic partial tx, looks like this: {:?}", partial_tx);
-					api::Error::Internal(
-						format!("Error processing partial transaction: {:?}", e),
-					)})
-				.unwrap();
-			Ok(Response::with(status::Ok))
+			match partial_tx.phase {
+				PartialTxPhase::SenderInitiation => {
+					let resp_tx=handle_sender_initiation(&self.config, &self.keychain, &partial_tx)
+					.map_err(|e| {
+						error!(LOGGER, "Phase 1 Sender Initiation -> Problematic partial tx, looks like this: {:?}", partial_tx);
+						api::Error::Internal(
+							format!("Error processing partial transaction: {:?}", e),
+						)})
+					.unwrap();
+					let json = serde_json::to_string(&resp_tx).unwrap();
+					Ok(Response::with((status::Ok, json)))
+				},
+				PartialTxPhase::SenderConfirmation => {
+					let resp_tx=handle_sender_confirmation(&self.config, &self.keychain, &partial_tx)
+					.map_err(|e| {
+						error!(LOGGER, "Phase 3 Sender Confirmation -> Problematic partial tx, looks like this: {:?}", partial_tx);
+						api::Error::Internal(
+							format!("Error processing partial transaction: {:?}", e),
+						)})
+					.unwrap();
+					let json = serde_json::to_string(&resp_tx).unwrap();
+					Ok(Response::with((status::Ok, json)))
+				},
+				_=> {
+					error!(LOGGER, "Unhandled Phase: {:?}", partial_tx);
+					Ok(Response::with((status::BadRequest, "Unhandled Phase")))
+				}
+			}
 		} else {
 			Ok(Response::with((status::BadRequest, "")))
 		}
@@ -174,33 +288,37 @@ pub fn receive_coinbase(
 	Ok((out, kern, block_fees))
 }
 
-/// Builds a full transaction from the partial one sent to us for transfer
-fn receive_transaction(
+/// builds a final transaction after the aggregated sig exchange
+fn build_final_transaction(
 	config: &WalletConfig,
 	keychain: &Keychain,
 	amount: u64,
-	blinding: BlindingFactor,
-	partial: Transaction,
-) -> Result<(Transaction, Identifier), Error> {
+	excess_sig: &secp::Signature,
+	tx: Transaction,
+) -> Result<Transaction, Error> {
 
 	let root_key_id = keychain.root_key_id();
 
 	// double check the fee amount included in the partial tx
  // we don't necessarily want to just trust the sender
  // we could just overwrite the fee here (but we won't) due to the ecdsa sig
-	let fee = tx_fee(partial.inputs.len(), partial.outputs.len() + 1, None);
-	if fee != partial.fee {
+	let fee = tx_fee(tx.inputs.len(), tx.outputs.len() + 1, None);
+	if fee != tx.fee {
 		return Err(Error::FeeDispute {
-			sender_fee: partial.fee,
+			sender_fee: tx.fee,
 			recipient_fee: fee,
 		});
 	}
 
 	let out_amount = amount - fee;
 
+	// Get output we created in earlier step
+	// TODO: will just be one for now, support multiple later
+	let output_vec = keychain.aggsig_get_outputs();
+
 	// operate within a lock on wallet data
 	let (key_id, derivation) = WalletData::with_wallet(&config.data_file_dir, |wallet_data| {
-		let (key_id, derivation) = next_available_key(&wallet_data, keychain);
+		let (key_id, derivation) = retrieve_existing_key(&wallet_data, output_vec[0].clone());
 
 		wallet_data.add_output(OutputData {
 			root_key_id: root_key_id.clone(),
@@ -216,27 +334,29 @@ fn receive_transaction(
 		(key_id, derivation)
 	})?;
 
-	let (tx_final, _) = build::transaction(
+	// Build final transaction, the sum of which should
+	// be the same as the exchanged excess values
+	let (mut final_tx, _) = build::transaction(
 		vec![
-			build::initial_tx(partial),
-			build::with_excess(blinding),
+			build::initial_tx(tx),
 			build::output(out_amount, key_id.clone()),
-		// build::with_fee(fee_amount),
 		],
 		keychain,
 	)?;
 
+	final_tx.excess_sig = excess_sig.serialize_der(&keychain.secp());
+
 	// make sure the resulting transaction is valid (could have been lied to on
  // excess).
-	tx_final.validate()?;
+	let _ = final_tx.validate()?;
 
 	debug!(
 		LOGGER,
-		"Received txn and built output - {:?}, {:?}, {}",
+		"Finalized transaction and built output - {:?}, {:?}, {}",
 		root_key_id.clone(),
 		key_id.clone(),
 		derivation,
 	);
 
-	Ok((tx_final, key_id))
+	Ok(final_tx)
 }
diff --git a/wallet/src/sender.rs b/wallet/src/sender.rs
index eef99577c..7e683fd4c 100644
--- a/wallet/src/sender.rs
+++ b/wallet/src/sender.rs
@@ -1,4 +1,4 @@
-// Copyright 2016 The Grin Developers
+// Copyright 2018 The Grin Developers
 //
 // Licensed under the Apache License, Version 2.0 (the "License");
 // you may not use this file except in compliance with the License.
@@ -12,8 +12,6 @@
 // See the License for the specific language governing permissions and
 // limitations under the License.
 
-use serde_json;
-
 use api;
 use client;
 use checker;
@@ -27,7 +25,7 @@ use util;
 
 /// Issue a new transaction to the provided sender by spending some of our
 /// wallet
-/// UTXOs. The destination can be "stdout" (for command line) or a URL to the
+/// UTXOs. The destination can be "stdout" (for command line) (currently disabled) or a URL to the
 /// recipients wallet receiver (to be implemented).
 
 pub fn issue_send_tx(
@@ -57,8 +55,16 @@ pub fn issue_send_tx(
 		max_outputs,
 		selection_strategy,
 	)?;
+	/*
+	 * -Sender picks random blinding factors for all outputs it participates in, computes total blinding excess xS
+	 * -Sender picks random nonce kS
+	 * -Sender posts inputs, outputs, Message M=fee, xS * G and kS * G to Receiver
+	*/
 
-	let partial_tx = build_partial_tx(amount, blind_sum, tx);
+// Create a new aggsig context
+	keychain.aggsig_create_context(blind_sum.secret_key());
+
+	let partial_tx = build_partial_tx(keychain, amount, None, tx);
 
 	// Closure to acquire wallet lock and lock the coins being spent
 	// so we avoid accidental double spend attempt.
@@ -74,27 +80,56 @@ pub fn issue_send_tx(
 		wallet_data.delete_output(&change_key);
 	});
 
-	if dest == "stdout" {
+	// TODO: stdout option removed for now, as it won't work very will with this version of
+	// aggsig exchange
+
+	/*if dest == "stdout" {
 		let json_tx = serde_json::to_string_pretty(&partial_tx).unwrap();
 		update_wallet()?;
 		println!("{}", json_tx);
-	} else if &dest[..4] == "http" {
-		let url = format!("{}/v1/receive/transaction", &dest);
-		debug!(LOGGER, "Posting partial transaction to {}", url);
-		let res = client::send_partial_tx(&url, &partial_tx);
-		match res {
-			Err(_) => {
-				error!(LOGGER, "Communication with receiver failed. Aborting transaction");
-				rollback_wallet()?;
-				return res;
-			}
-			Ok(_) => {
-				update_wallet()?;
-			}
-		}
-	} else {
+	} else */
+
+	if &dest[..4] != "http" {
 		panic!("dest formatted as {} but send -d expected stdout or http://IP:port", dest);
 	}
+
+	let url = format!("{}/v1/receive/transaction", &dest);
+	debug!(LOGGER, "Posting partial transaction to {}", url);
+	let res = client::send_partial_tx(&url, &partial_tx);
+	if let Err(e) = res {
+		error!(LOGGER, "Communication with receiver failed on SenderInitiation send. Aborting transaction");
+		rollback_wallet()?;
+		return Err(e);
+	}
+
+	/* -Sender receives xR * G, kR * G, sR
+	 * -Sender computes Schnorr challenge e = H(M | kR * G + kS * G)
+	 * -Sender verifies receivers sig, by verifying that kR * G + e * xR * G = sR * G·
+	 * -Sender computes their part of signature, sS = kS + e * xS
+	 * -Sender posts sS to receiver
+	*/
+	let (_amount, recp_pub_blinding, recp_pub_nonce, sig, tx) = read_partial_tx(keychain, &res.unwrap())?;
+	let res = keychain.aggsig_verify_partial_sig(&sig.unwrap(), &recp_pub_nonce, &recp_pub_blinding, tx.fee, lock_height);
+	if !res {
+		error!(LOGGER, "Partial Sig from recipient invalid.");
+		return Err(Error::Signature(String::from("Partial Sig from recipient invalid.")));
+	}
+
+	let sig_part=keychain.aggsig_calculate_partial_sig(&recp_pub_nonce, tx.fee, tx.lock_height).unwrap();
+
+	// Build the next stage, containing sS (and our pubkeys again, for the recipient's convenience) 
+	let mut partial_tx = build_partial_tx(keychain, amount, Some(sig_part), tx);
+	partial_tx.phase = PartialTxPhase::SenderConfirmation;
+
+	// And send again
+	let res = client::send_partial_tx(&url, &partial_tx);
+	if let Err(e) = res {
+		error!(LOGGER, "Communication with receiver failed on SenderConfirmation send. Aborting transaction");
+		rollback_wallet()?;
+		return Err(e);
+	}
+	//All good so
+	update_wallet()?;
 	Ok(())
 }
 
@@ -199,15 +234,15 @@ fn inputs_and_change(
 	}
 
 	// sender is responsible for setting the fee on the partial tx
- // recipient should double check the fee calculation and not blindly trust the
- // sender
+	// recipient should double check the fee calculation and not blindly trust the
+	// sender
 	let fee = tx_fee(coins.len(), 2, None);
 	parts.push(build::with_fee(fee));
 
 	// if we are spending 10,000 coins to send 1,000 then our change will be 9,000
- // the fee will come out of the amount itself
- // if the fee is 80 then the recipient will only receive 920
- // but our change will still be 9,000
+	// the fee will come out of the amount itself
+	// if the fee is 80 then the recipient will only receive 920
+	// but our change will still be 9,000
 	let change = total - amount;
 
 	// build inputs using the appropriate derived key_ids
diff --git a/wallet/src/types.rs b/wallet/src/types.rs
index 67cabef8e..fc6e77dd7 100644
--- a/wallet/src/types.rs
+++ b/wallet/src/types.rs
@@ -25,7 +25,6 @@ use std::cmp::min;
 
 use hyper;
 use serde_json;
-use util::secp;
 use tokio_core::reactor;
 use tokio_retry::Retry;
 use tokio_retry::strategy::FibonacciBackoff;
@@ -37,6 +36,9 @@ use core::core::{transaction, Transaction};
 use core::ser;
 use keychain;
 use util;
+use util::secp;
+use util::secp::Signature;
+use util::secp::key::PublicKey;
 use util::LOGGER;
 
 const DAT_FILE: &'static str = "wallet.dat";
@@ -78,6 +80,8 @@ pub enum Error {
 	Hyper(hyper::Error),
 	/// Error originating from hyper uri parsing.
 	Uri(hyper::error::UriError),
+	/// Error with signatures during exchange
+	Signature(String),
 	GenericError(String,)
 }
 
@@ -601,24 +605,55 @@ impl WalletData {
 	}
 }
 
-/// Helper in serializing the information a receiver requires to build a
-/// transaction.
+/// Define the stages of a transaction
 #[derive(Serialize, Deserialize, Debug, Clone)]
-pub struct PartialTx {
-	amount: u64,
-	blind_sum: String,
-	tx: String,
+pub enum PartialTxPhase {
+	SenderInitiation,
+	ReceiverInitiation,
+	SenderConfirmation,
+	ReceiverConfirmation
 }
 
-/// Builds a PartialTx from data sent by a sender (not yet completed by the receiver).
+/// Helper in serializing the information required during an interactive aggsig
+/// transaction
+#[derive(Serialize, Deserialize, Debug, Clone)]
+pub struct PartialTx {
+	pub phase:  PartialTxPhase,
+	pub amount: u64,
+	pub public_blind_excess: String,
+	pub public_nonce: String,
+	pub part_sig: String,
+	pub tx: String,
+}
+
+/// Builds a PartialTx 
+/// aggsig_tx_context should contain the private key/nonce pair
+/// the resulting partial tx will contain the corresponding public keys
 pub fn build_partial_tx(
+	keychain: &keychain::Keychain,
 	receive_amount: u64,
-	blind_sum: keychain::BlindingFactor,
+	part_sig: Option<secp::Signature>,
 	tx: Transaction,
 ) -> PartialTx {
+
+	let (pub_excess, pub_nonce) = keychain.aggsig_get_public_keys();
+	let mut pub_excess = pub_excess.serialize_vec(keychain.secp(), true).clone();
+	let len = pub_excess.clone().len();
+	let pub_excess: Vec<_> = pub_excess.drain(0..len).collect();
+
+	let mut pub_nonce = pub_nonce.serialize_vec(keychain.secp(), true);
+	let len = pub_nonce.clone().len();
+	let pub_nonce: Vec<_> = pub_nonce.drain(0..len).collect();
+	
 	PartialTx {
+		phase: PartialTxPhase::SenderInitiation,
 		amount: receive_amount,
-		blind_sum: util::to_hex(blind_sum.secret_key().as_ref().to_vec()),
+		public_blind_excess: util::to_hex(pub_excess),
+		public_nonce: util::to_hex(pub_nonce),
+		part_sig: match part_sig {
+			None => String::from("00"),
+			Some(p) => util::to_hex(p.serialize_der(&keychain.secp())),
+		},
 		tx: util::to_hex(ser::ser_vec(&tx).unwrap()),
 	}
 }
@@ -628,14 +663,21 @@ pub fn build_partial_tx(
 pub fn read_partial_tx(
 	keychain: &keychain::Keychain,
 	partial_tx: &PartialTx,
-) -> Result<(u64, keychain::BlindingFactor, Transaction), Error> {
-	let blind_bin = util::from_hex(partial_tx.blind_sum.clone())?;
-	let blinding = keychain::BlindingFactor::from_slice(keychain.secp(), &blind_bin[..])?;
+) -> Result<(u64, PublicKey, PublicKey, Option<Signature>, Transaction), Error> {
+	let blind_bin = util::from_hex(partial_tx.public_blind_excess.clone())?;
+	let blinding = PublicKey::from_slice(keychain.secp(), &blind_bin[..])?;
+	let nonce_bin = util::from_hex(partial_tx.public_nonce.clone())?;
+	let nonce = PublicKey::from_slice(keychain.secp(), &nonce_bin[..])?;
+	let sig_bin = util::from_hex(partial_tx.part_sig.clone())?;
+	let sig = match sig_bin.len() {
+		1 => None,
+		_ => Some(Signature::from_der(keychain.secp(), &sig_bin[..])?),
+	};
 	let tx_bin = util::from_hex(partial_tx.tx.clone())?;
 	let tx = ser::deserialize(&mut &tx_bin[..]).map_err(|_| {
 		Error::Format("Could not deserialize transaction, invalid format.".to_string())
 	})?;
-	Ok((partial_tx.amount, blinding, tx))
+	Ok((partial_tx.amount, blinding, nonce, sig, tx))
 }
 
 /// Amount in request to build a coinbase output.