diff --git a/lib/services/address/encoding.js b/lib/services/address/encoding.js
index 9c9b0483..fa9959e9 100644
--- a/lib/services/address/encoding.js
+++ b/lib/services/address/encoding.js
@@ -9,19 +9,24 @@ var $ = bitcore.util.preconditions;
 
 var exports = {};
 
-exports.encodeAddressIndexKey = function(hashTypeBuffer, hashBuffer, height, txidBuffer, index, spending) {
+exports.encodeAddressIndexKey = function(address, isSpent, height, txidBuffer, index, spending) {
+  var addressSizeBuffer = new Buffer(1);
+  addressSizeBuffer.writeUInt8(address.length);
+  var addressBuffer = new Buffer(address, 'utf8');
   var heightBuffer = new Buffer(4);
   heightBuffer.writeUInt32BE(height);
   var indexBuffer = new Buffer(4);
   indexBuffer.writeUInt32BE(index);
   var spendingBuffer = new Buffer(1);
   spendingBuffer.writeUInt8(spending);
+  var isSpentBuffer = new Buffer(1);
+  isSpentBuffer.writeUInt8(isSpent);
 
   var key = Buffer.concat({
     constants.PREFIXES.ADDRESS,
-    hashTypeBuffer,
-    hashBuffer,
-    constants.SPACER_MIN,
+    addressSizeBuffer,
+    addressBuffer,
+    isSpentBuffer,
     heightBuffer,
     txidBuffer,
     indexBuffer,
@@ -32,34 +37,38 @@ exports.encodeAddressIndexKey = function(hashTypeBuffer, hashBuffer, height, txi
 exports.decodeAddressIndexKey = function(buffer) {
   var reader = new BufferReader(buffer);
   var prefix = reader.read(1);
-  var hashTypeBuffer = reader.read(1);
-  var hashBuffer = reader.read(20);
 
-  var spacer = reader.read(1);
+  var addressSize = reader.readUInt8();
+  var address = reader.read(addressSize).toString('utf8');
+  var isSpent = reader.readUInt8();
   var height = reader.readUInt32BE();
   var txid = reader.read(32);
   var index = reader.readUInt32BE();
   var spending = reader.readUInt8();
   return {
     prefix: prefix,
-    hashTypeBuffer: hashTypeBuffer,
-    hashBuffer: hashBuffer,
+    address: address,
+    isSpent: isSpent ? true : false,
     height: height,
     txid: txid,
     index: outputIndex,
-    spending: spending
+    spending: spending ? true : false
   };
 };
 
-exports.encodeAddressIndexValue = function(satoshis) {
+exports.encodeAddressIndexValue = function(satoshis, scriptBuffer) {
   var satoshisBuffer = new Buffer(8);
   satoshisBuffer.writeDoubleBE(satoshis);
-  return satoshisBuffer;
+  return Buffer.concat([satoshisBuffer, scriptBuffer]);
 };
 
 exports.decodeAddressIndexValue = function(buffer) {
   var satoshis = buffer.readDoubleBE(0);
-  return satoshis;
+  var scriptBuffer = buffer.slice(8, buffer.length);
+  return {
+    satoshis: satoshis,
+    script: scriptBuffer
+  };
 };
 
 exports.encodeUnspentIndexKey = function(hashTypeBuffer, hashBuffer, txidBuffer, index) {
@@ -367,7 +376,7 @@ exports.decodeSummaryCacheValue = function(buffer) {
 exports.getAddressInfo = function(addressStr) {
   var addrObj = bitcore.Address(addressStr);
   var hashTypeBuffer = constants.HASH_TYPES_MAP[addrObj.type];
-  
+
   return {
     hashBuffer: addrObj.hashBuffer,
     hashTypeBuffer: hashTypeBuffer,
diff --git a/lib/services/address/index.js b/lib/services/address/index.js
index 392cdf18..139bb96f 100644
--- a/lib/services/address/index.js
+++ b/lib/services/address/index.js
@@ -49,6 +49,8 @@ var AddressService = function(options) {
   this.maxInputsQueryLength = options.maxInputsQueryLength || constants.MAX_INPUTS_QUERY_LENGTH;
   this.maxOutputsQueryLength = options.maxOutputsQueryLength || constants.MAX_OUTPUTS_QUERY_LENGTH;
 
+  this.concurrency = options.concurrency || 20;
+
   this._setMempoolIndexPath();
   if (options.mempoolMemoryIndex) {
     this.levelupStore = memdown;
@@ -450,23 +452,23 @@ AddressService.prototype.updateMempoolIndex = function(tx, add, callback) {
  * @param {Boolean} addOutput - If the block is being removed or added to the chain
  * @param {Function} callback
  */
-AddressService.prototype.blockHandler = function(block, addOutput, callback) {
+AddressService.prototype.blockHandler = function(block, connectBlock, callback) {
   var txs = block.transactions;
   var height = block.__height;
 
   var action = 'put';
-  if (!addOutput) {
+  var reverseAction = 'del';
+  if (!connectBlock) {
     action = 'del';
+    reverseAction = 'put';
   }
 
   var operations = [];
 
   var transactionLength = txs.length;
-  for (var i = 0; i < transactionLength; i++) {
+  async.eachLimit(txs, self.concurrency, function(tx, next) {
 
-    var tx = txs[i];
     var txid = tx.id;
-    var txidBuffer = new Buffer(txid, 'hex');
     var inputs = tx.inputs;
     var outputs = tx.outputs;
 
@@ -478,24 +480,15 @@ AddressService.prototype.blockHandler = function(block, addOutput, callback) {
       var output = outputs[outputIndex];
 
       var script = output.script;
+      var address = script.toAddress();
 
       if(!script) {
         log.debug('Invalid script');
         continue;
       }
 
-      var addressInfo = encoding.extractAddressInfoFromScript(script, this.node.network);
-      if (!addressInfo) {
-        continue;
-      }
 
-      // We need to use the height for indexes (and not the timestamp) because the
-      // the timestamp has unreliable sequential ordering. The next block
-      // can have a time that is previous to the previous block (however not
-      // less than the mean of the 11 previous blocks) and not greater than 2
-      // hours in the future.
-      var key = encoding.encodeOutputKey(addressInfo.hashBuffer, addressInfo.hashTypeBuffer,
-                                         height, txidBuffer, outputIndex);
+      var key = encoding.encodeAddressIndexKey(address, false, height, txid, outputIndex);
       var value = encoding.encodeOutputValue(output.satoshis, output._scriptBuffer);
       operations.push({
         type: action,
@@ -503,22 +496,20 @@ AddressService.prototype.blockHandler = function(block, addOutput, callback) {
         value: value
       });
 
-      addressInfo.hashHex = addressInfo.hashBuffer.toString('hex');
-
       // Collect data for subscribers
-      if (txmessages[addressInfo.hashHex]) {
-        txmessages[addressInfo.hashHex].outputIndexes.push(outputIndex);
+      if (txmessages[address]) {
+        txmessages[address].outputIndexes.push(outputIndex);
       } else {
-        txmessages[addressInfo.hashHex] = {
+        txmessages[address] = {
           tx: tx,
           height: height,
           outputIndexes: [outputIndex],
-          addressInfo: addressInfo,
+          address: address,
           timestamp: block.header.timestamp
         };
       }
 
-      this.balanceEventHandler(block, addressInfo);
+      this.balanceEventHandler(block, address);
 
     }
 
@@ -528,53 +519,50 @@ AddressService.prototype.blockHandler = function(block, addOutput, callback) {
     }
 
     if(tx.isCoinbase()) {
-      continue;
+      return next();
     }
 
-    for(var inputIndex = 0; inputIndex < inputs.length; inputIndex++) {
-
+    async.eachLimit(inputs, self.concurrency, function(input, next) {
       var input = inputs[inputIndex];
       var inputHash;
       var inputHashType;
 
-      if (input.script.isPublicKeyHashIn()) {
-        inputHash = Hash.sha256ripemd160(input.script.chunks[1].buf);
-        inputHashType = constants.HASH_TYPES.PUBKEY;
-      } else if (input.script.isScriptHashIn()) {
-        inputHash = Hash.sha256ripemd160(input.script.chunks[input.script.chunks.length - 1].buf);
-        inputHashType = constants.HASH_TYPES.REDEEMSCRIPT;
-      } else {
-        continue;
-      }
-
-      var prevTxIdBuffer = new Buffer(input.prevTxId, 'hex');
+      var address = input.script.toAddress();
 
       // To be able to query inputs by address and spent height
-      var inputKey = encoding.encodeInputKey(inputHash, inputHashType, height, prevTxIdBuffer, input.outputIndex);
-      var inputValue = encoding.encodeInputValue(txidBuffer, inputIndex);
-
-      operations.push({
-        type: action,
-        key: inputKey,
-        value: inputValue
+      var inputKey = encoding.encodeAddressIndexKey(address, true, height, txid, inputIndex, true);
+      self.node.services.transaction.getTransaction(input.prevTxId, function(err, tx) {
+        if(err) {
+          return next(err);
+        }
+        var output = tx.outputs[input.outputIndex];
+        var outputKey = encoding.encodeAddressIndexKey(address, true, tx.__height, tx.id, input.outputIndex, false);
+        var outputKeyToDelete = encoding.encodeAddressIndexKey(address, false, tx.__height, tx.id, input.outputIndex, false);
+        var outputValue = encoding.encodeAdressIndexValue(output.satoshis, output._scriptBuffer);
+        var inputValue = encoding.encodeAddressIndexValue(output.satoshis, input._scriptBuffer);
+        operations = operations.concat([{
+          type: action,
+          key: inputKey,
+          value: inputValue
+        },
+        {
+          type: action,
+          key: outputKey,
+          value: outputValue
+        },
+        {
+          type: reverseAction,
+          key: outputKeyToDelete,
+          value: outputValue
+        }]);
+        next();
       });
 
-      // To be able to search for an input spending an output
-      var inputKeyMap = encoding.encodeInputKeyMap(prevTxIdBuffer, input.outputIndex);
-      var inputValueMap = encoding.encodeInputValueMap(txidBuffer, inputIndex);
-
-      operations.push({
-        type: action,
-        key: inputKeyMap,
-        value: inputValueMap
-      });
-
-    }
-  }
-
-  setImmediate(function() {
-    callback(null, operations);
+    }, function(err) {
+      callback(err, operations);
+    });
   });
+
 };
 
 /**