diff --git a/lib/modules/blockchain_process/blockchain.js b/lib/modules/blockchain_process/blockchain.js
index 7f8ecaf2b..d4edb6a30 100644
--- a/lib/modules/blockchain_process/blockchain.js
+++ b/lib/modules/blockchain_process/blockchain.js
@@ -64,7 +64,7 @@ var Blockchain = function(options) {
     this.config.account = {};
     this.config.account.password = fs.embarkPath("templates/boilerplate/config/development/password");
     this.config.genesisBlock = fs.embarkPath("templates/boilerplate/config/development/genesis.json");
-    this.config.datadir = fs.embarkPath(".embark/development/datadir");
+    this.config.datadir = fs.dappPath(".embark/development/datadir");
   }
 
   const spaceMessage = 'The path for %s in blockchain config contains spaces, please remove them';
diff --git a/lib/modules/storage/storageProcessesLauncher.js b/lib/modules/storage/storageProcessesLauncher.js
index 5f7a0156c..79b9a3b8c 100644
--- a/lib/modules/storage/storageProcessesLauncher.js
+++ b/lib/modules/storage/storageProcessesLauncher.js
@@ -113,6 +113,7 @@ class StorageProcessesLauncher {
       self.processes[storageName].send({
         action: constants.blockchain.init, options: {
           storageConfig: self.storageConfig,
+          blockchainConfig: self.blockchainConfig,
           cors: self.buildCors(storageName)
         }
       });
diff --git a/lib/modules/swarm/process.js b/lib/modules/swarm/process.js
index 2ecf29d9c..4376a9919 100644
--- a/lib/modules/swarm/process.js
+++ b/lib/modules/swarm/process.js
@@ -9,6 +9,7 @@ class SwarmProcess extends ProcessWrapper {
   constructor(options) {
     super();
     this.storageConfig = options.storageConfig;
+    this.blockchainConfig = options.blockchainConfig;
     this.cors = options.cors;
     this.command = this.storageConfig.swarmPath || 'swarm';
   }
@@ -19,11 +20,14 @@ class SwarmProcess extends ProcessWrapper {
       return 'Account address and password are needed in the storage config to start the Swarm process';
     }
 
+    const datadir = this.blockchainConfig.datadir || fs.dappPath(`.embark/development/datadir`);
     const args = [
-        `--bzzaccount=${this.storageConfig.account.address}`,
-        `--password=${fs.dappPath(this.storageConfig.account.password)}`,
-        `--corsdomain=${self.cors.join(',')}`
-      ];
+      '--datadir', datadir,
+      '--bzzaccount', this.storageConfig.account.address,
+      '--password', fs.dappPath(this.storageConfig.account.password),
+      '--corsdomain', self.cors.join(',')
+    ];
+
     console.trace('Starting swarm process with arguments: ' + args.join(' '));
     this.child = child_process.spawn(this.command, args);