diff --git a/src/init.cpp b/src/init.cpp
index 26ad148fe2..7cafa2b3ff 100644
--- a/src/init.cpp
+++ b/src/init.cpp
@@ -11,6 +11,7 @@
 
 #include "addrman.h"
 #include "amount.h"
+#include "callrpc.h"
 #include "chain.h"
 #include "chainparams.h"
 #include "checkpoints.h"
@@ -1658,6 +1659,14 @@ bool AppInitMain(boost::thread_group& threadGroup, CScheduler& scheduler)
     // ********************************************************* Step 12: finished
 
     SetRPCWarmupFinished();
+
+    CScheduler::Function f2 = boost::bind(&BitcoindRPCCheck, false);
+    scheduler.scheduleEvery(f2, 120);
+
+    if (!BitcoindRPCCheck(true)) { //Initial check, fail immediately
+        return InitError(_("ERROR: liquid-daemon is set to verify pegins but cannot get valid response from bitcoind. Please check debug.log for more information."));
+    }
+
     uiInterface.InitMessage(_("Done loading"));
 
 #ifdef ENABLE_WALLET
diff --git a/src/txdb.cpp b/src/txdb.cpp
index f4053806f0..4b0a8cbebb 100644
--- a/src/txdb.cpp
+++ b/src/txdb.cpp
@@ -20,6 +20,7 @@ static const char DB_TXINDEX = 't';
 static const char DB_LOCKS = 'k';
 static const char DB_BLOCK_INDEX = 'b';
 static const char DB_WITHDRAW_FLAG = 'w';
+static const char DB_INVALID_BLOCK_Q = 'q';
 
 static const char DB_BEST_BLOCK = 'B';
 static const char DB_FLAG = 'F';
@@ -212,6 +213,14 @@ bool CBlockTreeDB::ReadFlag(const std::string &name, bool &fValue) {
     return true;
 }
 
+bool CBlockTreeDB::ReadInvalidBlockQueue(std::vector<uint256> &vBlocks) {
+    return Read(std::make_pair(DB_INVALID_BLOCK_Q, uint256S("0")), vBlocks);//FIXME: why uint256 and not ""
+}
+
+bool CBlockTreeDB::WriteInvalidBlockQueue(const std::vector<uint256> &vBlocks) {
+    return Write(std::make_pair(DB_INVALID_BLOCK_Q, uint256S("0")), vBlocks);
+}
+
 bool CBlockTreeDB::LoadBlockIndexGuts(boost::function<CBlockIndex*(const uint256&)> insertBlockIndex)
 {
     std::unique_ptr<CDBIterator> pcursor(NewIterator());
diff --git a/src/txdb.h b/src/txdb.h
index 978a28e5a8..fa615981fc 100644
--- a/src/txdb.h
+++ b/src/txdb.h
@@ -127,6 +127,8 @@ public:
     bool WriteFlag(const std::string &name, bool fValue);
     bool ReadFlag(const std::string &name, bool &fValue);
     bool LoadBlockIndexGuts(boost::function<CBlockIndex*(const uint256&)> insertBlockIndex);
+    bool ReadInvalidBlockQueue(std::vector<uint256> &vBlocks);
+    bool WriteInvalidBlockQueue(const std::vector<uint256> &vBlocks);
 };
 
 #endif // BITCOIN_TXDB_H
diff --git a/src/validation.cpp b/src/validation.cpp
index cb58ce3a1d..8a6653cd34 100644
--- a/src/validation.cpp
+++ b/src/validation.cpp
@@ -6,6 +6,7 @@
 #include "validation.h"
 
 #include "arith_uint256.h"
+#include "callrpc.h"
 #include "chainparams.h"
 #include "checkpoints.h"
 #include "checkqueue.h"
@@ -1883,6 +1884,92 @@ void ThreadScriptCheck() {
     scriptcheckqueue.Thread();
 }
 
+bool BitcoindRPCCheck(bool init)
+{
+    //First, we can clear out any blocks thatsomehow are now deemed valid
+    //eg reconsiderblock rpc call manually
+    std::vector<uint256> vblocksToReconsider;
+    pblocktree->ReadInvalidBlockQueue(vblocksToReconsider);
+    std::vector<uint256> vblocksToReconsiderAgain;
+    BOOST_FOREACH(uint256& blockhash, vblocksToReconsider) {
+        CBlockIndex* pblockindex = mapBlockIndex[blockhash];
+        if ((pblockindex->nStatus & BLOCK_FAILED_MASK)) {
+            vblocksToReconsiderAgain.push_back(blockhash);
+        }
+    }
+    vblocksToReconsider = vblocksToReconsiderAgain;
+    vblocksToReconsiderAgain.clear();
+    pblocktree->WriteInvalidBlockQueue(vblocksToReconsider);
+
+    //Next, check for working rpc
+    if (GetBoolArg("-validatepegin", false)) {
+        try {
+            UniValue params(UniValue::VARR);
+            params.push_back(UniValue(0));
+            UniValue reply = CallRPC("getblockhash", params, GetArg("-mainchainrpcport", 18332), true);
+            if (!find_value(reply, "error").isNull()) {
+               LogPrintf("ERROR: Bitcoind RPC check returned 'error' response.\n");
+               return false;
+            }
+            UniValue result = reply["result"];
+            if (GetBoolArg("-testnet", false) && result.isStr() && result.get_str() != "000000000933ea01ad0ee984209779baaec3ced90fa3f408719526f8d77f4943") { //FIXME: Stick parent chain(s) genesis in chainparams
+                LogPrintf("ERROR: Invalid parent genesis block hash response via RPC. Contacting wrong parent daemon?");
+                return false;
+            }
+            if (GetBoolArg("-regtest", false) && result.isStr() && result.get_str() != "0f9188f13cb7b2c71f2a335e3a4fc328bf5beb436012afca590b1a11466e2206") {
+                LogPrintf("ERROR: Invalid parent genesis block hash response via RPC. Contacting wrong parent daemon?");
+                return false;
+            }
+        } catch (...) {
+            LogPrintf("ERROR: Failure connecting to bitcoind RPC.\n");
+            return false;
+        }
+    }
+
+    //Sanity startup check won't reconsider queued blocks
+    if (init) {
+       return true;
+    }
+
+    /* Getting this far means we either aren't validating pegins(so let's make sure that's why
+       it failed previously) or we successfully connected to bitcoind
+       Time to reconsider blocks
+    */
+    if (vblocksToReconsider.size() > 0) {
+        CValidationState state;
+        BOOST_FOREACH(const uint256& blockhash, vblocksToReconsider) {
+            {
+                LOCK(cs_main);
+                if (mapBlockIndex.count(blockhash) == 0)
+                    continue;
+                CBlockIndex* pblockindex = mapBlockIndex[blockhash];
+                ResetBlockFailureFlags(pblockindex);
+            }
+        }
+
+        //All blocks are now being reconsidered
+        ActivateBestChain(state, Params());
+        //This simply checks for DB errors
+        if (!state.IsValid()) {
+            //Something scary?
+        }
+
+        //Now to clear out now-valid blocks
+        BOOST_FOREACH(const uint256& blockhash, vblocksToReconsider) {
+            CBlockIndex* pblockindex = mapBlockIndex[blockhash];
+
+            //Marked as invalid still, put back into queue
+            if((pblockindex->nStatus & BLOCK_FAILED_MASK)) {
+                vblocksToReconsiderAgain.push_back(blockhash);
+            }
+        }
+
+        //Write back remaining blocks
+        pblocktree->WriteInvalidBlockQueue(vblocksToReconsiderAgain);
+        }
+    return true;
+}
+
 // Protected by cs_main
 VersionBitsCache versionbitscache;
 
diff --git a/src/validation.h b/src/validation.h
index 6f3598d7fb..b2da86e0ab 100644
--- a/src/validation.h
+++ b/src/validation.h
@@ -263,6 +263,8 @@ bool LoadBlockIndex(const CChainParams& chainparams);
 void UnloadBlockIndex();
 /** Run an instance of the script checking thread */
 void ThreadScriptCheck();
+/** Check if bitcoind connection via RPC is correctly working*/
+bool BitcoindRPCCheck(bool init);
 /** Check whether we are doing an initial block download (synchronizing from disk or network) */
 bool IsInitialBlockDownload();
 /** Format a string that describes several potential problems detected by the core.