diff --git a/example/index.js b/example/index.js
index 40f4326f..4f4ea9d1 100755
--- a/example/index.js
+++ b/example/index.js
@@ -7,13 +7,21 @@
 process.title = 'bitcoind.js';
 
 var util = require('util');
+var fs = require('fs');
 var argv = require('optimist').argv;
+var rimraf = require('rimraf');
 
 /**
  * bitcoind
  */
 
-var bitcoind = require('../')();
+if (fs.existsSync(process.env.HOME + '/.libbitcoind-example')) {
+  rimraf.sync(process.env.HOME + '/.libbitcoind-example');
+}
+
+var bitcoind = require('../')({
+  directory: '~/.libbitcoind-example'
+});
 
 var genesisBlock = '0x000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f';
 var genesisTx = '0x4a5e1e4baab89f3a32518a88c31bc87f618f76673e2cc77ab2127b7afdeda33b';
diff --git a/lib/bitcoind.js b/lib/bitcoind.js
index 17b74d9f..37027650 100644
--- a/lib/bitcoind.js
+++ b/lib/bitcoind.js
@@ -8,6 +8,8 @@ var net = require('net');
 var EventEmitter = require('events').EventEmitter;
 var bitcoindjs = require('../build/Release/bitcoindjs.node');
 var util = require('util');
+var fs = require('fs');
+var mkdirp = require('mkdirp');
 
 /**
  * Bitcoin
@@ -28,9 +30,37 @@ function Bitcoin(options) {
 
   EventEmitter.call(this);
 
-  this.options = options;
+  this.options = options || {};
   this.wallet = Wallet;
 
+  if (typeof this.options === 'string') {
+    this.options = { datadir: this.options };
+  }
+
+  if (this.options.directory) {
+    this.options.datadir = this.options.directory;
+    delete this.options.directory;
+  }
+
+  this.options.datadir = this.options.datadir.replace(/^~/, process.env.HOME);
+
+  this.config = this.datadir + '/bitcoin.conf';
+
+  if (!fs.existsSync(this.options.datadir)) {
+    mkdirp.sync(this.options.datadir);
+  }
+
+  if (!fs.existsSync(this.config)) {
+    var password = Math.random().toString(36).slice(2)
+      + Math.random().toString(36).slice(2)
+      + Math.random().toString(36).slice(2);
+    fs.writeFileSync(this.config, ''
+      + 'rpcuser=bitcoinrpc\n'
+      + 'rpcpassword=' + password + '\n'
+      + '\n'
+    );
+  }
+
   Bitcoin.global = this;
 
   Object.keys(exports).forEach(function(key) {
@@ -65,8 +95,13 @@ Bitcoin.prototype.start = function(options, callback) {
 
   if (!callback) {
     callback = options;
+    options = null;
+  }
+
+  if (!options) {
     options = {};
   }
+
   if (!callback) {
     callback = utils.NOOP;
   }
@@ -82,6 +117,12 @@ Bitcoin.prototype.start = function(options, callback) {
   var exitCaught = none;
   var errorCaught = none;
 
+  Object.keys(this.options).forEach(function(key) {
+    if (options[key] == null) {
+      options[key] = self.options[key];
+    }
+  });
+
   this.log_pipe = bitcoindjs.start(options, function(err, status) {
     self._started = true;
 
diff --git a/package.json b/package.json
index cf470719..5b006146 100644
--- a/package.json
+++ b/package.json
@@ -18,10 +18,11 @@
   ],
   "dependencies": {
     "nan": "1.3.0",
-    "bn.js": "^0.10.0"
+    "mkdirp": "0.5.0"
   },
   "devDependencies": {
     "mocha": "~1.16.2",
-    "optimist": "0.6.0"
+    "optimist": "0.6.0",
+    "rimraf": "2.2.8"
   }
 }