diff --git a/ethchain/deprecated.go b/ethchain/deprecated.go
deleted file mode 100644
index 0985fa25d0..0000000000
--- a/ethchain/deprecated.go
+++ /dev/null
@@ -1,236 +0,0 @@
-package ethchain
-
-import (
-	"bytes"
-	"fmt"
-	"github.com/ethereum/eth-go/ethutil"
-	"math/big"
-)
-
-func (sm *StateManager) MakeStateObject(state *State, tx *Transaction) *StateObject {
-	contract := MakeContract(tx, state)
-	if contract != nil {
-		state.states[string(tx.CreationAddress())] = contract.state
-
-		return contract
-	}
-
-	return nil
-}
-
-func (sm *StateManager) EvalScript(state *State, script []byte, object *StateObject, tx *Transaction, block *Block) (ret []byte, gas *big.Int, err error) {
-	account := state.GetAccount(tx.Sender())
-
-	err = account.ConvertGas(tx.Gas, tx.GasPrice)
-	if err != nil {
-		ethutil.Config.Log.Debugln(err)
-		return
-	}
-
-	closure := NewClosure(account, object, script, state, tx.Gas, tx.GasPrice)
-	vm := NewVm(state, sm, RuntimeVars{
-		Origin:      account.Address(),
-		BlockNumber: block.BlockInfo().Number,
-		PrevHash:    block.PrevHash,
-		Coinbase:    block.Coinbase,
-		Time:        block.Time,
-		Diff:        block.Difficulty,
-		Value:       tx.Value,
-		//Price:       tx.GasPrice,
-	})
-	ret, gas, err = closure.Call(vm, tx.Data, nil)
-
-	// Update the account (refunds)
-	state.UpdateStateObject(account)
-	state.UpdateStateObject(object)
-
-	return
-}
-
-func (self *StateManager) ProcessTransaction(tx *Transaction, coinbase *StateObject, state *State, toContract bool) (gas *big.Int, err error) {
-	fmt.Printf("state root before update %x\n", state.Root())
-	defer func() {
-		if r := recover(); r != nil {
-			ethutil.Config.Log.Infoln(r)
-			err = fmt.Errorf("%v", r)
-		}
-	}()
-
-	gas = new(big.Int)
-	addGas := func(g *big.Int) { gas.Add(gas, g) }
-	addGas(GasTx)
-
-	// Get the sender
-	sender := state.GetAccount(tx.Sender())
-
-	if sender.Nonce != tx.Nonce {
-		err = NonceError(tx.Nonce, sender.Nonce)
-		return
-	}
-
-	sender.Nonce += 1
-	defer func() {
-		//state.UpdateStateObject(sender)
-		// Notify all subscribers
-		self.Ethereum.Reactor().Post("newTx:post", tx)
-	}()
-
-	txTotalBytes := big.NewInt(int64(len(tx.Data)))
-	//fmt.Println("txTotalBytes", txTotalBytes)
-	//txTotalBytes.Div(txTotalBytes, ethutil.Big32)
-	addGas(new(big.Int).Mul(txTotalBytes, GasData))
-
-	rGas := new(big.Int).Set(gas)
-	rGas.Mul(gas, tx.GasPrice)
-
-	// Make sure there's enough in the sender's account. Having insufficient
-	// funds won't invalidate this transaction but simple ignores it.
-	totAmount := new(big.Int).Add(tx.Value, rGas)
-	if sender.Amount.Cmp(totAmount) < 0 {
-		state.UpdateStateObject(sender)
-		err = fmt.Errorf("[TXPL] Insufficient amount in sender's (%x) account", tx.Sender())
-		return
-	}
-
-	coinbase.BuyGas(gas, tx.GasPrice)
-	state.UpdateStateObject(coinbase)
-	fmt.Printf("1. root %x\n", state.Root())
-
-	// Get the receiver
-	receiver := state.GetAccount(tx.Recipient)
-
-	// Send Tx to self
-	if bytes.Compare(tx.Recipient, tx.Sender()) == 0 {
-		// Subtract the fee
-		sender.SubAmount(rGas)
-	} else {
-		// Subtract the amount from the senders account
-		sender.SubAmount(totAmount)
-		state.UpdateStateObject(sender)
-		fmt.Printf("3. root %x\n", state.Root())
-
-		// Add the amount to receivers account which should conclude this transaction
-		receiver.AddAmount(tx.Value)
-		state.UpdateStateObject(receiver)
-		fmt.Printf("2. root %x\n", state.Root())
-	}
-
-	ethutil.Config.Log.Infof("[TXPL] Processed Tx %x\n", tx.Hash())
-
-	return
-}
-
-func (sm *StateManager) ApplyTransaction(coinbase []byte, state *State, block *Block, tx *Transaction) (totalGasUsed *big.Int, err error) {
-	/*
-		Applies transactions to the given state and creates new
-		state objects where needed.
-
-		If said objects needs to be created
-		run the initialization script provided by the transaction and
-		assume there's a return value. The return value will be set to
-		the script section of the state object.
-	*/
-	var (
-		addTotalGas = func(gas *big.Int) { totalGasUsed.Add(totalGasUsed, gas) }
-		gas         = new(big.Int)
-		script      []byte
-	)
-	totalGasUsed = big.NewInt(0)
-	snapshot := state.Snapshot()
-
-	ca := state.GetAccount(coinbase)
-	// Apply the transaction to the current state
-	gas, err = sm.ProcessTransaction(tx, ca, state, false)
-	addTotalGas(gas)
-	fmt.Println("gas used by tx", gas)
-
-	if tx.CreatesContract() {
-		if err == nil {
-			// Create a new state object and the transaction
-			// as it's data provider.
-			contract := sm.MakeStateObject(state, tx)
-			if contract != nil {
-				fmt.Println(Disassemble(contract.Init()))
-				// Evaluate the initialization script
-				// and use the return value as the
-				// script section for the state object.
-				script, gas, err = sm.EvalScript(state, contract.Init(), contract, tx, block)
-				fmt.Println("gas used by eval", gas)
-				addTotalGas(gas)
-				fmt.Println("total =", totalGasUsed)
-
-				fmt.Println("script len =", len(script))
-
-				if err != nil {
-					err = fmt.Errorf("[STATE] Error during init script run %v", err)
-					return
-				}
-				contract.script = script
-				state.UpdateStateObject(contract)
-			} else {
-				err = fmt.Errorf("[STATE] Unable to create contract")
-			}
-		} else {
-			err = fmt.Errorf("[STATE] contract creation tx: %v for sender %x", err, tx.Sender())
-		}
-	} else {
-		// Find the state object at the "recipient" address. If
-		// there's an object attempt to run the script.
-		stateObject := state.GetStateObject(tx.Recipient)
-		if err == nil && stateObject != nil && len(stateObject.Script()) > 0 {
-			_, gas, err = sm.EvalScript(state, stateObject.Script(), stateObject, tx, block)
-			addTotalGas(gas)
-		}
-	}
-
-	parent := sm.bc.GetBlock(block.PrevHash)
-	total := new(big.Int).Add(block.GasUsed, totalGasUsed)
-	limit := block.CalcGasLimit(parent)
-	if total.Cmp(limit) > 0 {
-		state.Revert(snapshot)
-		err = GasLimitError(total, limit)
-	}
-
-	return
-}
-
-// Apply transactions uses the transaction passed to it and applies them onto
-// the current processing state.
-func (sm *StateManager) ApplyTransactions(coinbase []byte, state *State, block *Block, txs []*Transaction) ([]*Receipt, []*Transaction) {
-	// Process each transaction/contract
-	var receipts []*Receipt
-	var validTxs []*Transaction
-	var ignoredTxs []*Transaction // Transactions which go over the gasLimit
-
-	totalUsedGas := big.NewInt(0)
-
-	for _, tx := range txs {
-		usedGas, err := sm.ApplyTransaction(coinbase, state, block, tx)
-		if err != nil {
-			if IsNonceErr(err) {
-				continue
-			}
-			if IsGasLimitErr(err) {
-				ignoredTxs = append(ignoredTxs, tx)
-				// We need to figure out if we want to do something with thse txes
-				ethutil.Config.Log.Debugln("Gastlimit:", err)
-				continue
-			}
-
-			ethutil.Config.Log.Infoln(err)
-		}
-
-		accumelative := new(big.Int).Set(totalUsedGas.Add(totalUsedGas, usedGas))
-		receipt := &Receipt{tx, ethutil.CopyBytes(state.Root().([]byte)), accumelative}
-
-		receipts = append(receipts, receipt)
-		validTxs = append(validTxs, tx)
-	}
-
-	fmt.Println("################# MADE\n", receipts, "\n############################")
-
-	// Update the total gas used for the block (to be mined)
-	block.GasUsed = totalUsedGas
-
-	return receipts, validTxs
-}
diff --git a/ethchain/state.go b/ethchain/state.go
index 9a9d0a2784..993f1fb08b 100644
--- a/ethchain/state.go
+++ b/ethchain/state.go
@@ -13,8 +13,6 @@ import (
 type State struct {
 	// The trie for this structure
 	trie *ethutil.Trie
-	// Nested states
-	states map[string]*State
 
 	stateObjects map[string]*StateObject
 
@@ -23,7 +21,7 @@ type State struct {
 
 // Create a new state from a given trie
 func NewState(trie *ethutil.Trie) *State {
-	return &State{trie: trie, states: make(map[string]*State), stateObjects: make(map[string]*StateObject), manifest: NewManifest()}
+	return &State{trie: trie, stateObjects: make(map[string]*StateObject), manifest: NewManifest()}
 }
 
 // Resets the trie and all siblings
@@ -38,12 +36,16 @@ func (s *State) Reset() {
 
 		stateObject.state.Reset()
 	}
+
+	s.Empty()
 }
 
 // Syncs the trie and all siblings
 func (s *State) Sync() {
 	// Sync all nested states
 	for _, stateObject := range s.stateObjects {
+		s.UpdateStateObject(stateObject)
+
 		if stateObject.state == nil {
 			continue
 		}
@@ -52,6 +54,18 @@ func (s *State) Sync() {
 	}
 
 	s.trie.Sync()
+
+	s.Empty()
+}
+
+func (self *State) Empty() {
+	self.stateObjects = make(map[string]*StateObject)
+}
+
+func (self *State) Update() {
+	for _, stateObject := range self.stateObjects {
+		self.UpdateStateObject(stateObject)
+	}
 }
 
 // Purges the current trie.
@@ -68,6 +82,7 @@ func (self *State) UpdateStateObject(stateObject *StateObject) {
 	addr := stateObject.Address()
 
 	if self.stateObjects[string(addr)] == nil {
+		panic("?")
 		self.stateObjects[string(addr)] = stateObject
 	}
 
@@ -98,13 +113,19 @@ func (self *State) GetStateObject(addr []byte) *StateObject {
 func (self *State) GetOrNewStateObject(addr []byte) *StateObject {
 	stateObject := self.GetStateObject(addr)
 	if stateObject == nil {
-		stateObject = NewStateObject(addr)
-		self.stateObjects[string(addr)] = stateObject
+		stateObject = self.NewStateObject(addr)
 	}
 
 	return stateObject
 }
 
+func (self *State) NewStateObject(addr []byte) *StateObject {
+	stateObject := NewStateObject(addr)
+	self.stateObjects[string(addr)] = stateObject
+
+	return stateObject
+}
+
 func (self *State) GetAccount(addr []byte) *StateObject {
 	return self.GetOrNewStateObject(addr)
 }
@@ -132,7 +153,7 @@ func (s *State) Snapshot() *State {
 
 func (s *State) Revert(snapshot *State) {
 	s.trie = snapshot.trie
-	s.states = snapshot.states
+	s.stateObjects = snapshot.stateObjects
 }
 
 func (s *State) Put(key, object []byte) {
diff --git a/ethchain/state_manager.go b/ethchain/state_manager.go
index 36bb148468..a0051181f2 100644
--- a/ethchain/state_manager.go
+++ b/ethchain/state_manager.go
@@ -181,7 +181,6 @@ func (sm *StateManager) ProcessBlock(state *State, parent, block *Block, dontRea
 	coinbase.SetGasPool(block.CalcGasLimit(parent))
 
 	// Process the transactions on to current block
-	//sm.ApplyTransactions(block.Coinbase, state, parent, block.Transactions())
 	sm.ProcessTransactions(coinbase, state, block, parent, block.Transactions())
 
 	// Block validation
@@ -197,6 +196,9 @@ func (sm *StateManager) ProcessBlock(state *State, parent, block *Block, dontRea
 		return err
 	}
 
+	// Update the state with pending changes
+	state.Update()
+
 	if !block.State().Cmp(state) {
 		return fmt.Errorf("Invalid merkle root.\nrec: %x\nis:  %x", block.State().trie.Root, state.trie.Root)
 	}
diff --git a/ethchain/state_object.go b/ethchain/state_object.go
index 1445bcd820..5fc738fee6 100644
--- a/ethchain/state_object.go
+++ b/ethchain/state_object.go
@@ -4,8 +4,15 @@ import (
 	"fmt"
 	"github.com/ethereum/eth-go/ethutil"
 	"math/big"
+	"strings"
 )
 
+type Code []byte
+
+func (self Code) String() string {
+	return strings.Join(Disassemble(self), " ")
+}
+
 type StateObject struct {
 	// Address of the object
 	address []byte
@@ -15,8 +22,8 @@ type StateObject struct {
 	Nonce      uint64
 	// Contract related attributes
 	state      *State
-	script     []byte
-	initScript []byte
+	script     Code
+	initScript Code
 
 	// Total gas pool is the total amount of gas currently
 	// left if this object is the coinbase. Gas is directly
@@ -30,12 +37,9 @@ func MakeContract(tx *Transaction, state *State) *StateObject {
 	if tx.IsContract() {
 		addr := tx.CreationAddress()
 
-		value := tx.Value
-		contract := NewContract(addr, value, ZeroHash256)
-
+		contract := state.NewStateObject(addr)
 		contract.initScript = tx.Data
-
-		state.UpdateStateObject(contract)
+		contract.state = NewState(ethutil.NewTrie(ethutil.Config.Db, ""))
 
 		return contract
 	}
@@ -120,13 +124,13 @@ func (c *StateObject) ReturnGas(gas, price *big.Int, state *State) {
 func (c *StateObject) AddAmount(amount *big.Int) {
 	c.SetAmount(new(big.Int).Add(c.Amount, amount))
 
-	ethutil.Config.Log.Printf(ethutil.LogLevelSystem, "%x: #%d %v (+ %v)\n", c.Address(), c.Nonce, c.Amount, amount)
+	ethutil.Config.Log.Printf(ethutil.LogLevelInfo, "%x: #%d %v (+ %v)\n", c.Address(), c.Nonce, c.Amount, amount)
 }
 
 func (c *StateObject) SubAmount(amount *big.Int) {
 	c.SetAmount(new(big.Int).Sub(c.Amount, amount))
 
-	ethutil.Config.Log.Printf(ethutil.LogLevelSystem, "%x: #%d %v (- %v)\n", c.Address(), c.Nonce, c.Amount, amount)
+	ethutil.Config.Log.Printf(ethutil.LogLevelInfo, "%x: #%d %v (- %v)\n", c.Address(), c.Nonce, c.Amount, amount)
 }
 
 func (c *StateObject) SetAmount(amount *big.Int) {
@@ -197,12 +201,12 @@ func (c *StateObject) Address() []byte {
 }
 
 // Returns the main script body
-func (c *StateObject) Script() []byte {
+func (c *StateObject) Script() Code {
 	return c.script
 }
 
 // Returns the initialization script
-func (c *StateObject) Init() []byte {
+func (c *StateObject) Init() Code {
 	return c.initScript
 }
 
diff --git a/ethchain/state_transition.go b/ethchain/state_transition.go
index 25efd64cc1..23175b0f32 100644
--- a/ethchain/state_transition.go
+++ b/ethchain/state_transition.go
@@ -67,13 +67,8 @@ func (self *StateTransition) Receiver() *StateObject {
 
 func (self *StateTransition) MakeStateObject(state *State, tx *Transaction) *StateObject {
 	contract := MakeContract(tx, state)
-	if contract != nil {
-		state.states[string(tx.CreationAddress())] = contract.state
 
-		return contract
-	}
-
-	return nil
+	return contract
 }
 
 func (self *StateTransition) UseGas(amount *big.Int) error {
@@ -137,6 +132,8 @@ func (self *StateTransition) TransitionState() (err error) {
 		receiver *StateObject
 	)
 
+	ethutil.Config.Log.Printf(ethutil.LogLevelInfo, "(~) %x\n", tx.Hash())
+
 	// Make sure this transaction's nonce is correct
 	if sender.Nonce != tx.Nonce {
 		return NonceError(tx.Nonce, sender.Nonce)
@@ -152,15 +149,17 @@ func (self *StateTransition) TransitionState() (err error) {
 	defer func() {
 		self.RefundGas()
 
-		if sender != nil {
-			self.state.UpdateStateObject(sender)
-		}
+		/*
+			if sender != nil {
+				self.state.UpdateStateObject(sender)
+			}
 
-		if receiver != nil {
-			self.state.UpdateStateObject(receiver)
-		}
+			if receiver != nil {
+				self.state.UpdateStateObject(receiver)
+			}
 
-		self.state.UpdateStateObject(self.Coinbase())
+			self.state.UpdateStateObject(self.Coinbase())
+		*/
 	}()
 
 	// Increment the nonce for the next transaction
@@ -209,6 +208,7 @@ func (self *StateTransition) TransitionState() (err error) {
 		receiver.script = code
 	} else {
 		if len(receiver.Script()) > 0 {
+			fmt.Println(receiver.Script())
 			_, err := self.Eval(receiver.Script(), receiver)
 			if err != nil {
 				return fmt.Errorf("Error during code execution %v", err)
diff --git a/ethchain/vm.go b/ethchain/vm.go
index 2ba0e2ef37..77a08faa6c 100644
--- a/ethchain/vm.go
+++ b/ethchain/vm.go
@@ -95,9 +95,7 @@ func (vm *Vm) RunClosure(closure *Closure, hook DebugHook) (ret []byte, err erro
 	step := 0
 	prevStep := 0
 
-	if ethutil.Config.Debug {
-		ethutil.Config.Log.Debugf("#   op\n")
-	}
+	ethutil.Config.Log.Debugf("#   op\n")
 
 	for {
 		prevStep = step
@@ -109,9 +107,8 @@ func (vm *Vm) RunClosure(closure *Closure, hook DebugHook) (ret []byte, err erro
 		val := closure.Get(pc)
 		// Get the opcode (it must be an opcode!)
 		op := OpCode(val.Uint())
-		if ethutil.Config.Debug {
-			ethutil.Config.Log.Debugf("%-3d %-4s", pc, op.String())
-		}
+
+		ethutil.Config.Log.Debugf("%-3d %-4s", pc, op.String())
 
 		gas := new(big.Int)
 		addStepGasUsage := func(amount *big.Int) {
@@ -525,8 +522,6 @@ func (vm *Vm) RunClosure(closure *Closure, hook DebugHook) (ret []byte, err erro
 				vm.state.Revert(snapshot)
 			} else {
 				stack.Push(ethutil.BigD(addr))
-
-				vm.state.UpdateStateObject(contract)
 			}
 		case CALL:
 			// TODO RE-WRITE
@@ -569,8 +564,6 @@ func (vm *Vm) RunClosure(closure *Closure, hook DebugHook) (ret []byte, err erro
 					} else {
 						stack.Push(ethutil.BigTrue)
 
-						vm.state.UpdateStateObject(contract)
-
 						mem.Set(retOffset.Int64(), retSize.Int64(), ret)
 					}
 				} else {
@@ -589,9 +582,11 @@ func (vm *Vm) RunClosure(closure *Closure, hook DebugHook) (ret []byte, err erro
 
 			receiver := vm.state.GetAccount(stack.Pop().Bytes())
 			receiver.AddAmount(closure.object.Amount)
-			vm.state.UpdateStateObject(receiver)
 
-			closure.object.state.Purge()
+			trie := closure.object.state.trie
+			trie.NewIterator().Each(func(key string, v *ethutil.Value) {
+				trie.Delete(key)
+			})
 
 			fallthrough
 		case STOP: // Stop the closure
diff --git a/ethminer/miner.go b/ethminer/miner.go
index 1ef9ca2296..4343b43336 100644
--- a/ethminer/miner.go
+++ b/ethminer/miner.go
@@ -154,6 +154,8 @@ func (self *Miner) mineNewBlock() {
 	// Accumulate the rewards included for this block
 	stateManager.AccumelateRewards(self.block.State(), self.block)
 
+	self.block.State().Update()
+
 	ethutil.Config.Log.Infoln("[MINER] Mining on block. Includes", len(self.txs), "transactions")
 
 	// Find a valid nonce