diff --git a/lib/services/block/index.js b/lib/services/block/index.js
index 240d2eb0..2a90600a 100644
--- a/lib/services/block/index.js
+++ b/lib/services/block/index.js
@@ -7,8 +7,6 @@ var Encoding = require('./encoding');
 var index = require('../../');
 var log = index.log;
 var BufferUtil = bitcore.util.buffer;
-var Reorg = require('./reorg');
-var async = require('async');
 var LRU = require('lru-cache');
 var utils = require('../../utils');
 var _ = require('lodash');
@@ -29,7 +27,7 @@ var BlockService = function(options) {
       return n.length * (1 * 1024 * 1024); // 50 MB of blocks
     }
   }); // header -> block
-  this._orphanedBlockList = []; // this is a list of block hashes for which one or more ancestor blocks has not yet arrived
+  this._chainTips = LRU(50); // chain tip -> [ tip-1 hash, tip-2 hash, tip-N hash]
 };
 
 inherits(BlockService, BaseService);
@@ -194,8 +192,8 @@ BlockService.prototype.getBlocks = function(startHash, endHash) {
   }
 
   if (lockedOut) {
-    return false;
     log.debug('Block Service: getBlocks called, but service is still in a lock out period.');
+    return false;
   }
 };
 
@@ -265,6 +263,69 @@ BlockService.prototype._blockAlreadyProcessed = function(block) {
   return this._blockHeaderQueue.get(block.hash);
 };
 
+BlockService.prototype._mergeBlockIntoChainTips = function(block) {
+
+  function getPrevHashChain(keys, hash) {
+
+    for(var i = 0; i <  keys.length; i++) {
+console.log('here');
+
+      var key = keys[i];
+
+      var searchChain = this._chainTips.get(key);
+      console.log(searchChain);
+
+      var chainIndex = searchChain.indexOf(hash);
+
+      if (chainIndex > -1) {
+        return searchChain.slice(chainIndex);
+      }
+    }
+
+  }
+
+
+  var prevHash = utils.reverseBufferToString(block.header.prevHash);
+  var hasChildren = false;
+
+  var chain = this._chainTips.get(prevHash);
+  if (chain) {
+    chain.unshift(prevHash);
+  }
+
+  var keys = this._chainTips.keys();
+
+  // looking for chains where this block is an ancestor of the tip of the chain
+  for(var i = 0; i < keys.length; i++) {
+
+    var key = keys[i];
+    var searchChain = this._chainTips.get(key);
+
+    var chainIndex = searchChain.indexOf(block.hash);
+
+    if (chainIndex > -1) {
+      hasChildren = true;
+      var newChain = searchChain.concat(chain || getPrevHashChain(keys, prevHash));
+      this._chainTips.set(key, newChain);
+    }
+
+  }
+
+  if (chain && !hasChildren) {
+
+    this._chainTips.set(block.hash, chain);
+
+  }
+
+  this._chainTips.del(prevHash);
+
+  // if we have don't have any parents or children in chainTips, then create a new chain with this block
+  if (!hasChildren && !chain) {
+    this._chainTips.set(block.hash, getPrevHashChain(keys, prevHash));
+  }
+
+};
+
 BlockService.prototype._onBlock = function(block) {
 
   // 1. have we already seen this block?
@@ -278,13 +339,16 @@ BlockService.prototype._onBlock = function(block) {
   // 3. store the block for safe keeping
   this._cacheBlock(block);
 
-  // 4. determine block state -- see the function for details about block state
-  var blockSteta = this._determineBlockState(block);
+  // 4. merge this block into the set of chain tips
+  this._mergeBlockIntoChainTips(block);
 
-  // 5. react to state of block
+  // 5. determine block state, reorg, orphaned, normal
+  var blockState = this._determineBlockState(block);
+
+  // 6. react to state of block
   switch (blockState) {
     case 'orphaned':
-      this._handleOrphanedBlock(block);
+      this._queueOrphanedBlock(block);
       break;
     case 'reorg':
       this.emit('reorg', block);
@@ -292,11 +356,15 @@ BlockService.prototype._onBlock = function(block) {
     default:
       this.setTip(block);
       this._broadcast(this.subscriptions.blocks, 'block/block', block);
+      // check to see if we can broadcast, previously orphaned blocks on the main chain.
       break;
   }
 
 };
 
+BlockService.prototype._setTip = function() {
+};
+
 BlockService.prototype._determineBlockState = function(block) {
 
   /*
@@ -328,7 +396,7 @@ BlockService.prototype._determineBlockState = function(block) {
 
   */
 
-  if (this._hasBlockArrivedOutOfOrder(block)) {
+  if (this._isOrphanBlock(block)) {
     return 'orphaned';
   }
 
@@ -340,8 +408,10 @@ BlockService.prototype._determineBlockState = function(block) {
 
 };
 
-BlockService.prototype._hasBlockArrivedOutOfOrder = function(block) {
+BlockService.prototype._isOrphanBlock = function(block) {
 
+  // all blocks that we've seen before should be in the blockHeaderQueue, if this block's prev
+  // hash isn't, then we definitely have an orphan block.
   var prevHash = utils.reverseBufferToString(block.header.prevHash);
   return !this._blockHeaderQueue.get(prevHash);
 
@@ -349,15 +419,13 @@ BlockService.prototype._hasBlockArrivedOutOfOrder = function(block) {
 
 BlockService.prototype._isChainReorganizing = function(block) {
 
-  var prevHash = utils.reverseBufferToString(block.header.prevHash);
-  return prevHash !== this.tip.hash
+  if (!this._isOrphanBlock()) {
+    var prevHash = utils.reverseBufferToString(block.header.prevHash);
+    return prevHash !== this.tip.hash;
+  }
 
-};
+  return false;
 
-
-BlockService.prototypee._findCommonAncestor = function(tipHash, forkedHash) {
-  // find the common ancestor between these 2 hashes
-  // most likely, we will already have the block headers
 };
 
 BlockService.prototype._broadcast = function(subscribers, name, entity) {
@@ -369,8 +437,14 @@ BlockService.prototype._broadcast = function(subscribers, name, entity) {
 BlockService.prototype._cacheBlock = function(block) {
 
   log.debug('Setting block: ' + block.hash + ' in the block cache.');
+
+  // 1. set the block queue, which holds full blocks in memory
   this._blockQueue.set(block.hash, block);
 
+  // 2. set the block header queue, which holds hash -> header -and- height -> headeer in memory
+  this._blockHeader.set(block.hash, block.header.toObject()); // we don't know about the height yet
+
+  // 3. store the block in the database
   var operations = this._getBlockOperations(block);
 
   this._db.batch(operations, function(err) {
@@ -439,13 +513,13 @@ BlockService.prototype._onDbError = function(err) {
 
 
 BlockService.prototype._isGetP2PBlocksLockedOut = function() {
-  return Date.now() < (self._getP2PBlocksLockoutPeriod + (self._previousdGetP2PBlocksLockTime || 0));
+  return Date.now() < (this._getP2PBlocksLockoutPeriod + (this._previousdGetP2PBlocksLockTime || 0));
 };
 
-BlockService.prototype._getP2PBlocks = function(block) {
+BlockService.prototype._getP2PBlocks = function() {
   if (!!this._isGetP2PBlocksLockedOut()) {
     this._previousdGetP2PBlocksLockTime = Date.now();
-    self._p2p.getBlocks({ startHash: startHash });
+    this._p2p.getBlocks({ startHash: startHash });
   }
 };
 
@@ -557,31 +631,35 @@ BlockService.prototype._getBlockOperations = function(obj) {
 
 };
 BlockService.prototype._handleReorg = function(hash, callback) {
-  log.error('A common ancestor block between hash: ' + this.tip.hash + ' (our current tip) and: ' +
-    block.hash + ' (the forked block) could not be found.');
 
-  this.node.stop();
+  // 1. log out that we are in a reorg state.
+  //log.warn('Chain reorganization detected! Our current block tip is: this._tip.hash ' +
 
-  var self = this;
-  self._printTipInfo('Reorg detected!');
+  //log.error('A common ancestor block between hash: ' + this.tip.hash + ' (our current tip) and: ' +
+  //  block.hash + ' (the forked block) could not be found.');
 
-  self.reorg = true;
-  self.emit('reorg');
+  //this.node.stop();
 
-  var reorg = new Reorg(self.node, self);
+  //var self = this;
+  //self._printTipInfo('Reorg detected!');
 
-  reorg.handleReorg(hash, function(err) {
+  //self.reorg = true;
+  //self.emit('reorg');
 
-    if(err) {
-      log.error('Reorg failed! ' + err);
-      self.node.stop();
-    }
+  //var reorg = new Reorg(self.node, self);
 
-    self._printTipInfo('Reorg successful!');
-    self.reorg = false;
-    self.cleanupAfterReorg(callback);
+  //reorg.handleReorg(hash, function(err) {
 
-  });
+  //  if(err) {
+  //    log.error('Reorg failed! ' + err);
+  //    self.node.stop();
+  //  }
+
+  //  self._printTipInfo('Reorg successful!');
+  //  self.reorg = false;
+  //  self.cleanupAfterReorg(callback);
+
+  //});
 
 };
 
diff --git a/test/services/block/index.unit.js b/test/services/block/index.unit.js
new file mode 100644
index 00000000..5b140f4a
--- /dev/null
+++ b/test/services/block/index.unit.js
@@ -0,0 +1,72 @@
+'use strict';
+
+var expect = require('chai').expect;
+var BlockService = require('../../../lib/services/block');
+var LRU = require('lru-cache');
+
+describe('Block Service', function() {
+
+  var blockService;
+
+  beforeEach(function() {
+    blockService = new BlockService({ node: { services: []}});
+    blockService._chainTips = LRU(50);
+  });
+
+
+  describe('Chain Tips', function() {
+    it('should merge blocks into chain tips using active chain blocks only' , function() {
+
+      var blocks = ['aa','bb','cc','dd','ee'];
+
+      blocks.forEach(function(n, index) {
+
+        var buf = new Buffer('00', 'hex');
+        if (index) {
+          buf = new Buffer(blocks[index-1], 'hex');
+        }
+
+        var block = { header: { prevHash: buf }, hash: n };
+        blockService._mergeBlockIntoChainTips(block);
+      });
+
+      expect(blockService._chainTips.length).to.equal(1);
+      expect(blockService._chainTips.get('ee')).to.deep.equal(['dd', 'cc', 'bb', 'aa', '00']);
+    });
+
+    it('should merge blocks into chain tips using out of order blocks' , function() {
+
+      var blocks = ['ee','aa','bb','dd','cc'];
+      var prevBlocks = ['dd','00','aa','cc','bb'];
+
+      blocks.forEach(function(n, index) {
+        var block = { header: { prevHash: new Buffer(prevBlocks[index], 'hex') }, hash: n };
+        blockService._mergeBlockIntoChainTips(block);
+      });
+
+
+      expect(blockService._chainTips.length).to.equal(1);
+      expect(blockService._chainTips.get('ee')).to.deep.equal(['dd', 'cc', 'bb', 'aa', '00']);
+    });
+
+    it('should merge chain tips where there is a fork (a parent block has more than one child)' , function() {
+
+      var blocks = ['aa','bb','cc','dd','ee'];
+      var prevBlocks = ['00','aa','aa','cc','dd'];
+
+      blocks.forEach(function(n, index) {
+        var block = { header: { prevHash: new Buffer(prevBlocks[index], 'hex') }, hash: n };
+        blockService._mergeBlockIntoChainTips(block);
+      });
+
+
+      expect(blockService._chainTips.length).to.equal(2);
+      expect(blockService._chainTips.get('ee')).to.deep.equal(['dd', 'cc', 'aa', '00']);
+    });
+
+
+  });
+
+});
+
+