diff --git a/createdb.sql b/createdb.sql
new file mode 100644
index 00000000..e02cb0ea
--- /dev/null
+++ b/createdb.sql
@@ -0,0 +1,3 @@
+CREATE DATABASE squeaknode;
+
+\connect squeaknode;
diff --git a/itests/docker-compose.yml b/itests/docker-compose.yml
index 43482bd8..dc49c272 100644
--- a/itests/docker-compose.yml
+++ b/itests/docker-compose.yml
@@ -70,6 +70,17 @@ services:
       - net.ipv6.conf.all.disable_ipv6=0
     entrypoint: ["./start-lnd.sh"]
 
+  squeaknode_db:
+    image: postgres
+    container_name: test_squeaknode_db
+    environment:
+      - POSTGRES_DB=postgres
+      - POSTGRES_USER=postgres
+      - POSTGRES_PASSWORD=postgres
+    volumes:
+      - ../createdb.sql:/docker-entrypoint-initdb.d/init.sql
+      - squeaknode_pgdata:/var/lib/postgresql
+
   squeaknode:
     image: squeaknode
     container_name: test_squeaknode
@@ -78,6 +89,9 @@ services:
       dockerfile: Dockerfile
     depends_on:
       - "lnd_server"
+      - "squeaknode_db"
+    environment:
+      - SQUEAKNODE_DB_CONNECTION_STRING=postgresql://postgres:postgres@squeaknode_db/squeaknode
     volumes:
       - test_shared:/rpc
       - test_lnd_server_dir:/root/.lnd
@@ -85,6 +99,7 @@ services:
     links:
       - "btcd:btcd"
       - "lnd_server:lnd"
+      - "squeaknode_db:squeaknode_db"
     sysctls:
       - net.ipv6.conf.all.disable_ipv6=0
     entrypoint: ["./start-squeaknode.sh"]
@@ -136,3 +151,7 @@ volumes:
     driver: local
   test_lnd_server_dir:
     driver: local
+
+  # postgres db data
+  squeaknode_pgdata:
+    driver: local
diff --git a/squeaknode/db/squeak_db.py b/squeaknode/db/squeak_db.py
index 03b9399b..45703777 100644
--- a/squeaknode/db/squeak_db.py
+++ b/squeaknode/db/squeak_db.py
@@ -932,7 +932,7 @@ class SqueakDb:
     def insert_sent_offer(self, sent_offer):
         """ Insert a new sent offer. """
         ins = self.sent_offers.insert().values(
-            squeak_hash=sent_offer.squeak_hash,
+            squeak_hash=sent_offer.squeak_hash.hex(),
             payment_hash=sent_offer.payment_hash,
             secret_key=sent_offer.secret_key,
             nonce=sent_offer.nonce.hex(),
@@ -1008,7 +1008,7 @@ class SqueakDb:
     def insert_received_payment(self, received_payment):
         """ Insert a new received payment. """
         ins = self.received_payments.insert().values(
-            squeak_hash=received_payment.squeak_hash,
+            squeak_hash=received_payment.squeak_hash.hex(),
             payment_hash=received_payment.payment_hash,
             price_msat=received_payment.price_msat,
             settle_index=received_payment.settle_index,
@@ -1161,7 +1161,7 @@ class SqueakDb:
             return None
         return SentOffer(
             sent_offer_id=row["sent_offer_id"],
-            squeak_hash=row["squeak_hash"],
+            squeak_hash=bytes.fromhex(row["squeak_hash"]),
             payment_hash=row["payment_hash"],
             secret_key=row["secret_key"],
             nonce=bytes.fromhex(row["nonce"]),
@@ -1178,7 +1178,7 @@ class SqueakDb:
         return ReceivedPayment(
             received_payment_id=row["received_payment_id"],
             created=row["created"],
-            squeak_hash=row["squeak_hash"],
+            squeak_hash=bytes.fromhex(row["squeak_hash"]),
             payment_hash=row["payment_hash"],
             price_msat=row["price_msat"],
             settle_index=row["settle_index"],