diff --git a/lib/coins.py b/lib/coins.py
index 989bec1..f9922d1 100644
--- a/lib/coins.py
+++ b/lib/coins.py
@@ -21,7 +21,7 @@ import sys
 
 from lib.hash import Base58, hash160, ripemd160, double_sha256, hash_to_str
 from lib.script import ScriptPubKey
-from lib.tx import Deserializer
+from lib.tx import Deserializer, DeserializerSegWit
 from lib.util import cachedproperty, subclasses
 
 
@@ -204,11 +204,14 @@ class Coin(object):
 
     @classmethod
     def read_block(cls, block, height):
-        '''Return a tuple (header, tx_hashes, txs) given a raw block at
-        the given height.'''
+        '''Returns a pair (header, tx_list) given a raw block and height.
+
+        tx_list is a list of (deserialized_tx, tx_hash) pairs.
+        '''
+        deserializer = cls.deserializer()
         hlen = cls.header_len(height)
         header, rest = block[:hlen], block[hlen:]
-        return (header, ) + Deserializer(rest).read_block()
+        return (header, deserializer(rest).read_block())
 
     @classmethod
     def decimal_value(cls, value):
@@ -234,6 +237,10 @@ class Coin(object):
             'nonce': nonce,
         }
 
+    @classmethod
+    def deserializer(cls):
+        return Deserializer
+
 
 class Bitcoin(Coin):
     NAME = "Bitcoin"
@@ -271,6 +278,19 @@ class BitcoinTestnet(Bitcoin):
     IRC_PREFIX = "ET_"
 
 
+class BitcoinTestnetSegWit(BitcoinTestnet):
+    '''Bitcoin Testnet for Core bitcoind >= 0.13.1.
+
+    Unfortunately 0.13.1 broke backwards compatibility of the RPC
+    interface's TX serialization, SegWit transactions serialize
+    differently than with earlier versions.  If you are using such a
+    bitcoind on testnet, you must use this class as your "COIN".
+    '''
+    @classmethod
+    def deserializer(cls):
+        return DeserializerSegWit
+
+
 class Litecoin(Coin):
     NAME = "Litecoin"
     SHORTNAME = "LTC"
diff --git a/lib/tx.py b/lib/tx.py
index 2fb86cd..565595e 100644
--- a/lib/tx.py
+++ b/lib/tx.py
@@ -72,28 +72,25 @@ class Deserializer(object):
         self.cursor = 0
 
     def read_tx(self):
+        '''Return a (Deserialized TX, TX_HASH) pair.
+
+        The hash needs to be reversed for human display; for efficiency
+        we process it in the natural serialized order.
+        '''
+        start = self.cursor
         return Tx(
             self._read_le_int32(),  # version
             self._read_inputs(),    # inputs
             self._read_outputs(),   # outputs
             self._read_le_uint32()  # locktime
-        )
+        ), double_sha256(self.binary[start:self.cursor])
 
     def read_block(self):
-        tx_hashes = []
-        txs = []
-        binary = self.binary
-        hash = double_sha256
+        '''Returns a list of (deserialized_tx, tx_hash) pairs.'''
         read_tx = self.read_tx
-        append_hash = tx_hashes.append
-        for n in range(self._read_varint()):
-            start = self.cursor
-            txs.append(read_tx())
-            # Note this hash needs to be reversed for human display
-            # For efficiency we store it in the natural serialized order
-            append_hash(hash(binary[start:self.cursor]))
-        assert self.cursor == len(binary)
-        return tx_hashes, txs
+        txs = [read_tx() for n in range(self._read_varint())]
+        assert self.cursor == len(self.binary)
+        return txs
 
     def _read_inputs(self):
         read_input = self._read_input
@@ -161,3 +158,62 @@ class Deserializer(object):
         result, = unpack_from('<Q', self.binary, self.cursor)
         self.cursor += 8
         return result
+
+
+class TxSegWit(namedtuple("Tx", "version marker flag inputs outputs "
+                          "witness locktime")):
+    '''Class representing a SegWit transaction.'''
+
+    @cachedproperty
+    def is_coinbase(self):
+        return self.inputs[0].is_coinbase
+
+
+class DeserializerSegWit(Deserializer):
+
+    # https://bitcoincore.org/en/segwit_wallet_dev/#transaction-serialization
+
+    def _read_byte(self):
+        cursor = self.cursor
+        self.cursor += 1
+        return self.binary[cursor]
+
+    def _read_witness(self, fields):
+        read_witness_field = self._read_witness_field
+        return [read_witness_field() for i in range(fields)]
+
+    def _read_witness_field(self):
+        read_varbytes = self._read_varbytes
+        return [read_varbytes() for i in range(self._read_varint())]
+
+    def read_tx(self):
+        '''Return a (Deserialized TX, TX_HASH) pair.
+
+        The hash needs to be reversed for human display; for efficiency
+        we process it in the natural serialized order.
+        '''
+        marker = self.binary[self.cursor + 4]
+        if marker:
+            return super().read_tx()
+
+        # Ugh, this is nasty.
+        start = self.cursor
+        version = self._read_le_int32()
+        orig_ser = self.binary[start:self.cursor]
+
+        marker = self._read_byte()
+        flag = self._read_byte()
+
+        start = self.cursor
+        inputs = self._read_inputs()
+        outputs = self._read_outputs()
+        orig_ser += self.binary[start:self.cursor]
+
+        witness = self._read_witness(len(inputs))
+
+        start = self.cursor
+        locktime = self._read_le_uint32()
+        orig_ser += self.binary[start:self.cursor]
+
+        return TxSegWit(version, marker, flag, inputs,
+                        outputs, witness, locktime), double_sha256(orig_ser)
diff --git a/server/block_processor.py b/server/block_processor.py
index 0174bcf..2acad10 100644
--- a/server/block_processor.py
+++ b/server/block_processor.py
@@ -444,7 +444,9 @@ class BlockProcessor(server.db.DB):
         utxo_cache_size = len(self.utxo_cache) * 205
         db_deletes_size = len(self.db_deletes) * 57
         hist_cache_size = len(self.history) * 180 + self.history_size * 4
-        tx_hash_size = (self.tx_count - self.fs_tx_count) * 74
+        # Roughly ntxs * 32 + nblocks * 42
+        tx_hash_size = ((self.tx_count - self.fs_tx_count) * 32
+                        + (self.height - self.fs_height) * 42)
         utxo_MB = (db_deletes_size + utxo_cache_size) // one_MB
         hist_MB = (hist_cache_size + tx_hash_size) // one_MB
 
@@ -458,28 +460,28 @@ class BlockProcessor(server.db.DB):
         if utxo_MB + hist_MB >= self.cache_MB or hist_MB >= self.cache_MB // 5:
             self.flush(utxo_MB >= self.cache_MB * 4 // 5)
 
-    def fs_advance_block(self, header, tx_hashes, txs):
+    def fs_advance_block(self, header, txs):
         '''Update unflushed FS state for a new block.'''
         prior_tx_count = self.tx_counts[-1] if self.tx_counts else 0
 
         # Cache the new header, tx hashes and cumulative tx count
         self.headers.append(header)
-        self.tx_hashes.append(tx_hashes)
+        self.tx_hashes.append(b''.join(tx_hash for tx, tx_hash in txs))
         self.tx_counts.append(prior_tx_count + len(txs))
 
     def advance_block(self, block, touched):
-        header, tx_hashes, txs = self.coin.read_block(block, self.height + 1)
+        header, txs = self.coin.read_block(block, self.height + 1)
         if self.tip != self.coin.header_prevhash(header):
             raise ChainReorg
 
-        self.fs_advance_block(header, tx_hashes, txs)
+        self.fs_advance_block(header, txs)
         self.tip = self.coin.header_hash(header)
         self.height += 1
-        undo_info = self.advance_txs(tx_hashes, txs, touched)
+        undo_info = self.advance_txs(txs, touched)
         if self.daemon.cached_height() - self.height <= self.env.reorg_limit:
             self.write_undo_info(self.height, b''.join(undo_info))
 
-    def advance_txs(self, tx_hashes, txs, touched):
+    def advance_txs(self, txs, touched):
         undo_info = []
 
         # Use local vars for speed in the loops
@@ -492,7 +494,7 @@ class BlockProcessor(server.db.DB):
         spend_utxo = self.spend_utxo
         undo_info_append = undo_info.append
 
-        for tx, tx_hash in zip(txs, tx_hashes):
+        for tx, tx_hash in txs:
             hashXs = set()
             add_hashX = hashXs.add
             tx_numb = s_pack('<I', tx_num)
@@ -533,14 +535,14 @@ class BlockProcessor(server.db.DB):
         self.assert_flushed()
 
         for block in blocks:
-            header, tx_hashes, txs = self.coin.read_block(block, self.height)
+            header, txs = self.coin.read_block(block, self.height)
             header_hash = self.coin.header_hash(header)
             if header_hash != self.tip:
                 raise ChainError('backup block {} is not tip {} at height {:,d}'
                                  .format(hash_to_str(header_hash),
                                          hash_to_str(self.tip), self.height))
 
-            self.backup_txs(tx_hashes, txs, touched)
+            self.backup_txs(txs, touched)
             self.tip = self.coin.header_prevhash(header)
             assert self.height >= 0
             self.height -= 1
@@ -553,7 +555,7 @@ class BlockProcessor(server.db.DB):
         touched.discard(None)
         self.backup_flush(touched)
 
-    def backup_txs(self, tx_hashes, txs, touched):
+    def backup_txs(self, txs, touched):
         # Prevout values, in order down the block (coinbase first if present)
         # undo_info is in reverse block order
         undo_info = self.read_undo_info(self.height)
@@ -569,10 +571,7 @@ class BlockProcessor(server.db.DB):
         script_hashX = self.coin.hashX_from_script
         undo_entry_len = 12 + self.coin.HASHX_LEN
 
-        rtxs = reversed(txs)
-        rtx_hashes = reversed(tx_hashes)
-
-        for tx_hash, tx in zip(rtx_hashes, rtxs):
+        for tx, tx_hash in reversed(txs):
             for idx, txout in enumerate(tx.outputs):
                 # Spend the TX outputs.  Be careful with unspendable
                 # outputs - we didn't save those in the first place.
diff --git a/server/db.py b/server/db.py
index 0c653e3..9b1b2d2 100644
--- a/server/db.py
+++ b/server/db.py
@@ -10,7 +10,6 @@
 
 import array
 import ast
-import itertools
 import os
 from struct import pack, unpack
 from bisect import bisect_left, bisect_right
@@ -234,7 +233,7 @@ class DB(util.LoggedClass):
 
         assert len(self.tx_hashes) == blocks_done
         assert len(self.tx_counts) == new_height + 1
-        hashes = b''.join(itertools.chain(*block_tx_hashes))
+        hashes = b''.join(block_tx_hashes)
         assert len(hashes) % 32 == 0
         assert len(hashes) // 32 == txs_done
 
diff --git a/server/mempool.py b/server/mempool.py
index 09b9fd7..e61bf0b 100644
--- a/server/mempool.py
+++ b/server/mempool.py
@@ -13,7 +13,6 @@ import time
 from collections import defaultdict
 
 from lib.hash import hash_to_str, hex_str_to_hash
-from lib.tx import Deserializer
 import lib.util as util
 from server.daemon import DaemonError
 
@@ -200,6 +199,7 @@ class MemPool(util.LoggedClass):
         not depend on the result remaining the same are fine.
         '''
         script_hashX = self.coin.hashX_from_script
+        deserializer = self.coin.deserializer()
         db_utxo_lookup = self.db.db_utxo_lookup
         txs = self.txs
 
@@ -207,7 +207,7 @@ class MemPool(util.LoggedClass):
         for tx_hash, raw_tx in raw_tx_map.items():
             if not tx_hash in txs:
                 continue
-            tx = Deserializer(raw_tx).read_tx()
+            tx, _tx_hash = deserializer(raw_tx).read_tx()
 
             # Convert the tx outputs into (hashX, value) pairs
             txout_pairs = [(script_hashX(txout.pk_script), txout.value)
@@ -271,6 +271,7 @@ class MemPool(util.LoggedClass):
         if not hashX in self.hashXs:
             return []
 
+        deserializer = self.coin.deserializer()
         hex_hashes = self.hashXs[hashX]
         raw_txs = await self.daemon.getrawtransactions(hex_hashes)
         result = []
@@ -281,7 +282,7 @@ class MemPool(util.LoggedClass):
             txin_pairs, txout_pairs = item
             tx_fee = (sum(v for hashX, v in txin_pairs)
                       - sum(v for hashX, v in txout_pairs))
-            tx = Deserializer(raw_tx).read_tx()
+            tx, tx_hash = deserializer(raw_tx).read_tx()
             unconfirmed = any(txin.prev_hash in self.txs for txin in tx.inputs)
             result.append((hex_hash, tx_fee, unconfirmed))
         return result
diff --git a/server/protocol.py b/server/protocol.py
index 1b0516f..60b7a45 100644
--- a/server/protocol.py
+++ b/server/protocol.py
@@ -14,7 +14,6 @@ import traceback
 
 from lib.hash import sha256, double_sha256, hash_to_str, hex_str_to_hash
 from lib.jsonrpc import JSONRPC
-from lib.tx import Deserializer
 from server.daemon import DaemonError
 from server.version import VERSION
 
@@ -427,7 +426,8 @@ class ElectrumX(Session):
             if not raw_tx:
                 return None
             raw_tx = bytes.fromhex(raw_tx)
-            tx = Deserializer(raw_tx).read_tx()
+            deserializer = self.coin.deserializer()
+            tx, tx_hash = deserializer(raw_tx).read_tx()
             if index >= len(tx.outputs):
                 return None
             return self.coin.address_from_script(tx.outputs[index].pk_script)