diff --git a/Cargo.toml b/Cargo.toml
index 02192ca..82f6736 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -41,6 +41,9 @@ ark-bn254 = "0.5.0"
 ark-ff = "0.5.0"
 tiny-keccak = { version = "2.0.2", features = ["keccak"] }
 base64 = "0.22.1"
+bip39 = "2.2.0"
+hmac-sha512 = "1.1.7"
+chrono = "0.4.41"
 
 rocksdb = { version = "0.21.0", default-features = false, features = [
   "snappy",
diff --git a/common/src/block.rs b/common/src/block.rs
index 2e4e9b9..64bce30 100644
--- a/common/src/block.rs
+++ b/common/src/block.rs
@@ -1,41 +1,56 @@
+use rs_merkle::Hasher;
 use std::io::{Cursor, Read};
 
-use rs_merkle::Hasher;
-
-use crate::merkle_tree_public::hasher::OwnHasher;
-use nssa;
+use crate::{OwnHasher, transaction::EncodedTransaction};
 
 pub type BlockHash = [u8; 32];
 pub type BlockId = u64;
+pub type TimeStamp = u64;
+
+#[derive(Debug, Clone)]
+pub struct BlockHeader {
+    pub block_id: BlockId,
+    pub prev_block_hash: BlockHash,
+    pub hash: BlockHash,
+    pub timestamp: TimeStamp,
+    pub signature: nssa::Signature,
+}
+
+#[derive(Debug, Clone)]
+pub struct BlockBody {
+    pub transactions: Vec<EncodedTransaction>,
+}
 
 #[derive(Debug, Clone)]
 pub struct Block {
-    pub block_id: BlockId,
-    pub prev_block_id: BlockId,
-    pub prev_block_hash: BlockHash,
-    pub hash: BlockHash,
-    pub transactions: Vec<nssa::PublicTransaction>,
+    pub header: BlockHeader,
+    pub body: BlockBody,
 }
 
 #[derive(Debug, PartialEq, Eq)]
 pub struct HashableBlockData {
     pub block_id: BlockId,
-    pub prev_block_id: BlockId,
     pub prev_block_hash: BlockHash,
-    pub transactions: Vec<nssa::PublicTransaction>,
+    pub timestamp: TimeStamp,
+    pub transactions: Vec<EncodedTransaction>,
 }
 
-impl From<HashableBlockData> for Block {
-    fn from(value: HashableBlockData) -> Self {
-        let data = value.to_bytes();
-        let hash = OwnHasher::hash(&data);
-
-        Self {
-            block_id: value.block_id,
-            prev_block_id: value.prev_block_id,
-            hash,
-            transactions: value.transactions,
-            prev_block_hash: value.prev_block_hash,
+impl HashableBlockData {
+    pub fn into_block(self, signing_key: &nssa::PrivateKey) -> Block {
+        let data_bytes = self.to_bytes();
+        let signature = nssa::Signature::new(signing_key, &data_bytes);
+        let hash = OwnHasher::hash(&data_bytes);
+        Block {
+            header: BlockHeader {
+                block_id: self.block_id,
+                prev_block_hash: self.prev_block_hash,
+                hash,
+                timestamp: self.timestamp,
+                signature,
+            },
+            body: BlockBody {
+                transactions: self.transactions,
+            },
         }
     }
 }
@@ -43,10 +58,10 @@ impl From<HashableBlockData> for Block {
 impl From<Block> for HashableBlockData {
     fn from(value: Block) -> Self {
         Self {
-            block_id: value.block_id,
-            prev_block_id: value.prev_block_id,
-            prev_block_hash: value.prev_block_hash,
-            transactions: value.transactions,
+            block_id: value.header.block_id,
+            prev_block_hash: value.header.prev_block_hash,
+            timestamp: value.header.timestamp,
+            transactions: value.body.transactions,
         }
     }
 }
@@ -55,11 +70,15 @@ impl HashableBlockData {
     pub fn to_bytes(&self) -> Vec<u8> {
         let mut bytes = Vec::new();
         bytes.extend_from_slice(&self.block_id.to_le_bytes());
-        bytes.extend_from_slice(&self.prev_block_id.to_le_bytes());
         bytes.extend_from_slice(&self.prev_block_hash);
+        bytes.extend_from_slice(&self.timestamp.to_le_bytes());
         let num_transactions: u32 = self.transactions.len() as u32;
         bytes.extend_from_slice(&num_transactions.to_le_bytes());
         for tx in &self.transactions {
+            let transaction_bytes = tx.to_bytes();
+            let num_transaction_bytes: u32 = transaction_bytes.len() as u32;
+
+            bytes.extend_from_slice(&num_transaction_bytes.to_le_bytes());
             bytes.extend_from_slice(&tx.to_bytes());
         }
         bytes
@@ -70,37 +89,47 @@ impl HashableBlockData {
         let mut cursor = Cursor::new(data);
 
         let block_id = u64_from_cursor(&mut cursor);
-        let prev_block_id = u64_from_cursor(&mut cursor);
 
         let mut prev_block_hash = [0u8; 32];
         cursor.read_exact(&mut prev_block_hash).unwrap();
 
+        let timestamp = u64_from_cursor(&mut cursor);
+
         let num_transactions = u32_from_cursor(&mut cursor) as usize;
 
         let mut transactions = Vec::with_capacity(num_transactions);
         for _ in 0..num_transactions {
-            let tx = nssa::PublicTransaction::from_cursor(&mut cursor).unwrap();
+            let tx_len = u32_from_cursor(&mut cursor) as usize;
+            let mut tx_bytes = Vec::with_capacity(tx_len);
+
+            for _ in 0..tx_len {
+                let mut buff = [0; 1];
+                cursor.read_exact(&mut buff).unwrap();
+                tx_bytes.push(buff[0]);
+            }
+
+            let tx = EncodedTransaction::from_bytes(tx_bytes);
             transactions.push(tx);
         }
 
         Self {
             block_id,
-            prev_block_id,
             prev_block_hash,
+            timestamp,
             transactions,
         }
     }
 }
 
 // TODO: Improve error handling. Remove unwraps.
-fn u32_from_cursor(cursor: &mut Cursor<&[u8]>) -> u32 {
+pub fn u32_from_cursor(cursor: &mut Cursor<&[u8]>) -> u32 {
     let mut word_buf = [0u8; 4];
     cursor.read_exact(&mut word_buf).unwrap();
     u32::from_le_bytes(word_buf)
 }
 
 // TODO: Improve error handling. Remove unwraps.
-fn u64_from_cursor(cursor: &mut Cursor<&[u8]>) -> u64 {
+pub fn u64_from_cursor(cursor: &mut Cursor<&[u8]>) -> u64 {
     let mut word_buf = [0u8; 8];
     cursor.read_exact(&mut word_buf).unwrap();
     u64::from_le_bytes(word_buf)
diff --git a/common/src/commitment.rs b/common/src/commitment.rs
index 0874bc7..a905ad1 100644
--- a/common/src/commitment.rs
+++ b/common/src/commitment.rs
@@ -1,6 +1,6 @@
 use serde::{Deserialize, Serialize};
 
-use crate::merkle_tree_public::CommitmentHashType;
+use crate::CommitmentHashType;
 
 #[derive(Debug, Serialize, Deserialize, Clone, Default, PartialEq, Eq)]
 pub struct Commitment {
diff --git a/common/src/execution_input.rs b/common/src/execution_input.rs
index c4f2141..08ff598 100644
--- a/common/src/execution_input.rs
+++ b/common/src/execution_input.rs
@@ -1,6 +1,6 @@
 use serde::{Deserialize, Serialize};
 
-use crate::merkle_tree_public::TreeHashType;
+use crate::TreeHashType;
 
 #[derive(Debug, Clone, Serialize, Deserialize)]
 pub struct PublicNativeTokenSend {
diff --git a/common/src/lib.rs b/common/src/lib.rs
index 3b2ddff..67d628d 100644
--- a/common/src/lib.rs
+++ b/common/src/lib.rs
@@ -1,10 +1,10 @@
-use merkle_tree_public::TreeHashType;
+use rs_merkle::Hasher;
 use serde::Deserialize;
+use sha2::{Digest, Sha256, digest::FixedOutput};
 
 pub mod block;
 pub mod commitment;
 pub mod execution_input;
-pub mod merkle_tree_public;
 pub mod nullifier;
 pub mod rpc_primitives;
 pub mod sequencer_client;
@@ -16,6 +16,25 @@ pub mod test_utils;
 
 use rpc_primitives::errors::RpcError;
 
+pub type TreeHashType = [u8; 32];
+pub type CommitmentHashType = Vec<u8>;
+
+#[derive(Debug, Clone)]
+///Our own hasher.
+/// Currently it is SHA256 hasher wrapper. May change in a future.
+pub struct OwnHasher {}
+
+impl Hasher for OwnHasher {
+    type Hash = TreeHashType;
+
+    fn hash(data: &[u8]) -> TreeHashType {
+        let mut hasher = Sha256::new();
+
+        hasher.update(data);
+        <TreeHashType>::from(hasher.finalize_fixed())
+    }
+}
+
 ///Account id on blockchain
 pub type AccountId = TreeHashType;
 
diff --git a/common/src/merkle_tree_public/hasher.rs b/common/src/merkle_tree_public/hasher.rs
deleted file mode 100644
index ed9443a..0000000
--- a/common/src/merkle_tree_public/hasher.rs
+++ /dev/null
@@ -1,20 +0,0 @@
-use rs_merkle::Hasher;
-use sha2::{Digest, Sha256, digest::FixedOutput};
-
-use super::TreeHashType;
-
-#[derive(Debug, Clone)]
-///Our own hasher.
-/// Currently it is SHA256 hasher wrapper. May change in a future.
-pub struct OwnHasher {}
-
-impl Hasher for OwnHasher {
-    type Hash = TreeHashType;
-
-    fn hash(data: &[u8]) -> TreeHashType {
-        let mut hasher = Sha256::new();
-
-        hasher.update(data);
-        <TreeHashType>::from(hasher.finalize_fixed())
-    }
-}
diff --git a/common/src/merkle_tree_public/merkle_tree.rs b/common/src/merkle_tree_public/merkle_tree.rs
deleted file mode 100644
index 8911344..0000000
--- a/common/src/merkle_tree_public/merkle_tree.rs
+++ /dev/null
@@ -1,312 +0,0 @@
-use std::{collections::HashMap, fmt, marker::PhantomData};
-
-use rs_merkle::{MerkleProof, MerkleTree};
-use serde::{
-    Deserialize, Deserializer, Serialize,
-    de::{SeqAccess, Visitor},
-    ser::SerializeSeq,
-};
-
-use crate::{transaction::Transaction, utxo_commitment::UTXOCommitment};
-
-use super::{TreeHashType, hasher::OwnHasher, tree_leav_item::TreeLeavItem};
-
-#[derive(Clone)]
-pub struct HashStorageMerkleTree<Leav: TreeLeavItem + Clone> {
-    leaves: HashMap<usize, Leav>,
-    hash_to_id_map: HashMap<TreeHashType, usize>,
-    tree: MerkleTree<OwnHasher>,
-}
-
-impl<Leav: TreeLeavItem + Clone + Serialize> Serialize for HashStorageMerkleTree<Leav> {
-    fn serialize<S>(&self, serializer: S) -> Result<S::Ok, S::Error>
-    where
-        S: serde::Serializer,
-    {
-        let mut vector = self.leaves.iter().collect::<Vec<_>>();
-        vector.sort_by(|a, b| a.0.cmp(b.0));
-
-        let mut seq = serializer.serialize_seq(Some(self.leaves.len()))?;
-        for element in vector.iter() {
-            seq.serialize_element(element.1)?;
-        }
-        seq.end()
-    }
-}
-
-struct HashStorageMerkleTreeDeserializer<Leav: TreeLeavItem + Clone> {
-    marker: PhantomData<fn() -> HashStorageMerkleTree<Leav>>,
-}
-
-impl<Leaf: TreeLeavItem + Clone> HashStorageMerkleTreeDeserializer<Leaf> {
-    fn new() -> Self {
-        HashStorageMerkleTreeDeserializer {
-            marker: PhantomData,
-        }
-    }
-}
-
-impl<'de, Leav: TreeLeavItem + Clone + Deserialize<'de>> Visitor<'de>
-    for HashStorageMerkleTreeDeserializer<Leav>
-{
-    type Value = HashStorageMerkleTree<Leav>;
-
-    fn expecting(&self, formatter: &mut fmt::Formatter) -> fmt::Result {
-        formatter.write_str("HashStorageMerkleTree key value sequence.")
-    }
-
-    fn visit_seq<A>(self, mut seq: A) -> Result<Self::Value, A::Error>
-    where
-        A: SeqAccess<'de>,
-    {
-        let mut vector = vec![];
-
-        loop {
-            let opt_key = seq.next_element::<Leav>()?;
-            if let Some(value) = opt_key {
-                vector.push(value);
-            } else {
-                break;
-            }
-        }
-
-        Ok(HashStorageMerkleTree::new(vector))
-    }
-}
-
-impl<'de, Leav: TreeLeavItem + Clone + Deserialize<'de>> serde::Deserialize<'de>
-    for HashStorageMerkleTree<Leav>
-{
-    fn deserialize<D: Deserializer<'de>>(deserializer: D) -> Result<Self, D::Error> {
-        deserializer.deserialize_seq(HashStorageMerkleTreeDeserializer::new())
-    }
-}
-
-pub type PublicTransactionMerkleTree = HashStorageMerkleTree<Transaction>;
-
-pub type UTXOCommitmentsMerkleTree = HashStorageMerkleTree<UTXOCommitment>;
-
-impl<Leav: TreeLeavItem + Clone> HashStorageMerkleTree<Leav> {
-    pub fn new(leaves_vec: Vec<Leav>) -> Self {
-        let mut leaves_map = HashMap::new();
-        let mut hash_to_id_map = HashMap::new();
-
-        let leaves_hashed: Vec<TreeHashType> = leaves_vec
-            .iter()
-            .enumerate()
-            .map(|(id, tx)| {
-                leaves_map.insert(id, tx.clone());
-                hash_to_id_map.insert(tx.hash(), id);
-                tx.hash()
-            })
-            .collect();
-        Self {
-            leaves: leaves_map,
-            hash_to_id_map,
-            tree: MerkleTree::from_leaves(&leaves_hashed),
-        }
-    }
-
-    pub fn get_tx(&self, hash: TreeHashType) -> Option<&Leav> {
-        self.hash_to_id_map
-            .get(&hash)
-            .and_then(|id| self.leaves.get(id))
-    }
-
-    pub fn get_root(&self) -> Option<TreeHashType> {
-        self.tree.root()
-    }
-
-    pub fn get_proof(&self, hash: TreeHashType) -> Option<MerkleProof<OwnHasher>> {
-        self.hash_to_id_map
-            .get(&hash)
-            .map(|id| self.tree.proof(&[*id]))
-    }
-
-    pub fn get_proof_multiple(&self, hashes: &[TreeHashType]) -> Option<MerkleProof<OwnHasher>> {
-        let ids_opt: Vec<Option<&usize>> = hashes
-            .iter()
-            .map(|hash| self.hash_to_id_map.get(hash))
-            .collect();
-
-        let is_valid = ids_opt.iter().all(|el| el.is_some());
-
-        if is_valid {
-            let ids: Vec<usize> = ids_opt.into_iter().map(|el| *el.unwrap()).collect();
-
-            Some(self.tree.proof(&ids))
-        } else {
-            None
-        }
-    }
-
-    pub fn add_tx(&mut self, tx: &Leav) {
-        let last = self.leaves.len();
-
-        self.leaves.insert(last, tx.clone());
-        self.hash_to_id_map.insert(tx.hash(), last);
-
-        self.tree.insert(tx.hash());
-
-        self.tree.commit();
-    }
-
-    pub fn add_tx_multiple(&mut self, txs: Vec<Leav>) {
-        for tx in txs.iter() {
-            let last = self.leaves.len();
-
-            self.leaves.insert(last, tx.clone());
-            self.hash_to_id_map.insert(tx.hash(), last);
-        }
-
-        self.tree
-            .append(&mut txs.iter().map(|tx| tx.hash()).collect());
-
-        self.tree.commit();
-    }
-}
-
-#[cfg(test)]
-mod tests {
-    use super::*;
-
-    // Mock implementation of TreeLeavItem trait for testing
-    #[derive(Debug, Clone, PartialEq, Eq, Hash, Serialize, Deserialize)]
-    struct MockTransaction {
-        pub hash: TreeHashType,
-    }
-
-    impl TreeLeavItem for MockTransaction {
-        fn hash(&self) -> TreeHashType {
-            self.hash
-        }
-    }
-
-    fn get_first_32_bytes(s: &str) -> [u8; 32] {
-        let mut buffer = [0u8; 32];
-        let bytes = s.as_bytes();
-        let len = std::cmp::min(32, bytes.len());
-
-        buffer[..len].copy_from_slice(&bytes[..len]);
-        buffer
-    }
-
-    #[test]
-    fn test_new_merkle_tree() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-
-        let tree = HashStorageMerkleTree::new(vec![tx1.clone(), tx2.clone()]);
-
-        assert_eq!(tree.leaves.len(), 2);
-        assert!(tree.get_root().is_some());
-    }
-
-    #[test]
-    fn test_new_merkle_tree_serialize() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-
-        let tree = HashStorageMerkleTree::new(vec![tx1.clone(), tx2.clone()]);
-
-        let binding = serde_json::to_vec(&tree).unwrap();
-
-        let obj: HashStorageMerkleTree<MockTransaction> = serde_json::from_slice(&binding).unwrap();
-
-        assert_eq!(tree.leaves, obj.leaves);
-        assert_eq!(tree.hash_to_id_map, obj.hash_to_id_map);
-        assert_eq!(tree.tree.root(), obj.tree.root());
-    }
-
-    #[test]
-    fn test_get_tx() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-
-        let tree = HashStorageMerkleTree::new(vec![tx1.clone(), tx2.clone()]);
-
-        assert_eq!(tree.get_tx(tx1.hash()), Some(&tx1));
-        assert_eq!(tree.get_tx(tx2.hash()), Some(&tx2));
-    }
-
-    #[test]
-    fn test_get_proof() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-
-        let tree = HashStorageMerkleTree::new(vec![tx1.clone(), tx2.clone()]);
-
-        let proof = tree.get_proof(tx1.hash());
-        assert!(proof.is_some());
-    }
-
-    #[test]
-    fn test_add_tx() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-
-        let mut tree = HashStorageMerkleTree::new(vec![tx1.clone()]);
-
-        tree.add_tx(&tx2);
-        assert_eq!(tree.leaves.len(), 2);
-        assert_eq!(tree.get_tx(tx2.hash()), Some(&tx2));
-    }
-
-    #[test]
-    fn test_add_tx_multiple() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-        let tx3 = MockTransaction {
-            hash: get_first_32_bytes("tx3"),
-        };
-
-        let mut tree = HashStorageMerkleTree::new(vec![tx1.clone()]);
-        tree.add_tx_multiple(vec![tx2.clone(), tx3.clone()]);
-
-        assert_eq!(tree.leaves.len(), 3);
-        assert_eq!(tree.get_tx(tx2.hash()), Some(&tx2));
-        assert_eq!(tree.get_tx(tx3.hash()), Some(&tx3));
-    }
-
-    #[test]
-    fn test_get_proof_multiple() {
-        let tx1 = MockTransaction {
-            hash: get_first_32_bytes("tx1"),
-        };
-        let tx2 = MockTransaction {
-            hash: get_first_32_bytes("tx2"),
-        };
-        let tx3 = MockTransaction {
-            hash: get_first_32_bytes("tx3"),
-        };
-
-        let tree = HashStorageMerkleTree::new(vec![tx1.clone(), tx2.clone(), tx3.clone()]);
-        let proof = tree.get_proof_multiple(&[tx1.hash(), tx2.hash()]);
-
-        assert!(proof.is_some());
-    }
-}
diff --git a/common/src/merkle_tree_public/mod.rs b/common/src/merkle_tree_public/mod.rs
deleted file mode 100644
index f1fc89e..0000000
--- a/common/src/merkle_tree_public/mod.rs
+++ /dev/null
@@ -1,6 +0,0 @@
-pub mod hasher;
-pub mod merkle_tree;
-pub mod tree_leav_item;
-
-pub type TreeHashType = [u8; 32];
-pub type CommitmentHashType = Vec<u8>;
diff --git a/common/src/merkle_tree_public/tree_leav_item.rs b/common/src/merkle_tree_public/tree_leav_item.rs
deleted file mode 100644
index 3b919a8..0000000
--- a/common/src/merkle_tree_public/tree_leav_item.rs
+++ /dev/null
@@ -1,19 +0,0 @@
-use crate::{transaction::Transaction, utxo_commitment::UTXOCommitment};
-
-use super::TreeHashType;
-
-pub trait TreeLeavItem {
-    fn hash(&self) -> TreeHashType;
-}
-
-impl TreeLeavItem for Transaction {
-    fn hash(&self) -> TreeHashType {
-        self.body().hash()
-    }
-}
-
-impl TreeLeavItem for UTXOCommitment {
-    fn hash(&self) -> TreeHashType {
-        self.hash
-    }
-}
diff --git a/common/src/nullifier.rs b/common/src/nullifier.rs
index 2c95741..f277efd 100644
--- a/common/src/nullifier.rs
+++ b/common/src/nullifier.rs
@@ -1,6 +1,6 @@
 use serde::{Deserialize, Serialize};
 
-use crate::merkle_tree_public::TreeHashType;
+use crate::TreeHashType;
 
 //ToDo: Update Nullifier model, when it is clear
 #[derive(Debug, Serialize, Deserialize, Clone, Default, PartialEq, Eq, Hash)]
diff --git a/common/src/sequencer_client/mod.rs b/common/src/sequencer_client/mod.rs
index d61b79d..92bcd62 100644
--- a/common/src/sequencer_client/mod.rs
+++ b/common/src/sequencer_client/mod.rs
@@ -12,6 +12,7 @@ use crate::rpc_primitives::requests::{
     GetTransactionByHashRequest, GetTransactionByHashResponse,
 };
 use crate::sequencer_client::json::AccountInitialData;
+use crate::transaction::{EncodedTransaction, NSSATransaction};
 use crate::{SequencerClientError, SequencerRpcError};
 
 pub mod json;
@@ -142,10 +143,12 @@ impl SequencerClient {
     }
 
     ///Send transaction to sequencer
-    pub async fn send_tx(
+    pub async fn send_tx_public(
         &self,
         transaction: nssa::PublicTransaction,
     ) -> Result<SendTxResponse, SequencerClientError> {
+        let transaction = EncodedTransaction::from(NSSATransaction::Public(transaction));
+
         let tx_req = SendTxRequest {
             transaction: transaction.to_bytes(),
         };
diff --git a/common/src/test_utils.rs b/common/src/test_utils.rs
index b956cd7..9d68db8 100644
--- a/common/src/test_utils.rs
+++ b/common/src/test_utils.rs
@@ -1,6 +1,13 @@
-use nssa;
+use crate::{
+    block::{Block, HashableBlockData},
+    transaction::{EncodedTransaction, NSSATransaction},
+};
 
-use crate::block::{Block, HashableBlockData};
+//Helpers
+
+pub fn sequencer_sign_key_for_testing() -> nssa::PrivateKey {
+    nssa::PrivateKey::try_new([37; 32]).unwrap()
+}
 
 //Dummy producers
 
@@ -10,23 +17,23 @@ use crate::block::{Block, HashableBlockData};
 ///
 /// `prev_hash` - hash of previous block, provide None for genesis
 ///
-/// `transactions` - vector of `Transaction` objects
+/// `transactions` - vector of `EncodedTransaction` objects
 pub fn produce_dummy_block(
     id: u64,
     prev_hash: Option<[u8; 32]>,
-    transactions: Vec<nssa::PublicTransaction>,
+    transactions: Vec<EncodedTransaction>,
 ) -> Block {
     let block_data = HashableBlockData {
         block_id: id,
-        prev_block_id: id.saturating_sub(1),
         prev_block_hash: prev_hash.unwrap_or_default(),
+        timestamp: id * 100,
         transactions,
     };
 
-    block_data.into()
+    block_data.into_block(&sequencer_sign_key_for_testing())
 }
 
-pub fn produce_dummy_empty_transaction() -> nssa::PublicTransaction {
+pub fn produce_dummy_empty_transaction() -> EncodedTransaction {
     let program_id = nssa::program::Program::authenticated_transfer_program().id();
     let addresses = vec![];
     let nonces = vec![];
@@ -36,7 +43,10 @@ pub fn produce_dummy_empty_transaction() -> nssa::PublicTransaction {
             .unwrap();
     let private_key = nssa::PrivateKey::try_new([1; 32]).unwrap();
     let witness_set = nssa::public_transaction::WitnessSet::for_message(&message, &[&private_key]);
-    nssa::PublicTransaction::new(message, witness_set)
+
+    let nssa_tx = nssa::PublicTransaction::new(message, witness_set);
+
+    EncodedTransaction::from(NSSATransaction::Public(nssa_tx))
 }
 
 pub fn create_transaction_native_token_transfer(
@@ -45,7 +55,7 @@ pub fn create_transaction_native_token_transfer(
     to: [u8; 32],
     balance_to_move: u128,
     signing_key: nssa::PrivateKey,
-) -> nssa::PublicTransaction {
+) -> EncodedTransaction {
     let addresses = vec![nssa::Address::new(from), nssa::Address::new(to)];
     let nonces = vec![nonce];
     let program_id = nssa::program::Program::authenticated_transfer_program().id();
@@ -53,5 +63,8 @@ pub fn create_transaction_native_token_transfer(
         nssa::public_transaction::Message::try_new(program_id, addresses, nonces, balance_to_move)
             .unwrap();
     let witness_set = nssa::public_transaction::WitnessSet::for_message(&message, &[&signing_key]);
-    nssa::PublicTransaction::new(message, witness_set)
+
+    let nssa_tx = nssa::PublicTransaction::new(message, witness_set);
+
+    EncodedTransaction::from(NSSATransaction::Public(nssa_tx))
 }
diff --git a/common/src/transaction.rs b/common/src/transaction.rs
index 1d0ccec..d196687 100644
--- a/common/src/transaction.rs
+++ b/common/src/transaction.rs
@@ -1,22 +1,34 @@
-use k256::ecdsa::{
-    Signature, SigningKey, VerifyingKey,
-    signature::{Signer, Verifier},
-};
+use k256::ecdsa::{Signature, SigningKey, VerifyingKey};
 use log::info;
-use secp256k1_zkp::{PedersenCommitment, Tweak};
 use serde::{Deserialize, Serialize};
 
 use sha2::{Digest, digest::FixedOutput};
 
-use crate::merkle_tree_public::TreeHashType;
-
 use elliptic_curve::{
     consts::{B0, B1},
     generic_array::GenericArray,
 };
 use sha2::digest::typenum::{UInt, UTerm};
 
-use crate::TransactionSignatureError;
+#[derive(Debug, Clone, PartialEq, Eq)]
+pub enum NSSATransaction {
+    Public(nssa::PublicTransaction),
+    PrivacyPreserving(nssa::PrivacyPreservingTransaction),
+}
+
+impl From<nssa::PublicTransaction> for NSSATransaction {
+    fn from(value: nssa::PublicTransaction) -> Self {
+        Self::Public(value)
+    }
+}
+
+impl From<nssa::PrivacyPreservingTransaction> for NSSATransaction {
+    fn from(value: nssa::PrivacyPreservingTransaction) -> Self {
+        Self::PrivacyPreserving(value)
+    }
+}
+
+use crate::TreeHashType;
 
 pub type CipherText = Vec<u8>;
 pub type Nonce = GenericArray<u8, UInt<UInt<UInt<UInt<UTerm, B1>, B1>, B0>, B0>>;
@@ -25,39 +37,45 @@ pub type Tag = u8;
 #[derive(Debug, Serialize, Deserialize, Clone, Copy, PartialEq, Eq)]
 pub enum TxKind {
     Public,
-    Private,
-    Shielded,
-    Deshielded,
+    PrivacyPreserving,
 }
 
 #[derive(Debug, Serialize, Deserialize, Clone, PartialEq, Eq)]
 ///General transaction object
-pub struct TransactionBody {
+pub struct EncodedTransaction {
     pub tx_kind: TxKind,
-    ///Tx input data (public part)
-    pub execution_input: Vec<u8>,
-    ///Tx output data (public_part)
-    pub execution_output: Vec<u8>,
-    ///Tx input utxo commitments
-    pub utxo_commitments_spent_hashes: Vec<TreeHashType>,
-    ///Tx output utxo commitments
-    pub utxo_commitments_created_hashes: Vec<TreeHashType>,
-    ///Tx output nullifiers
-    pub nullifier_created_hashes: Vec<TreeHashType>,
-    ///Execution proof (private part)
-    pub execution_proof_private: String,
     ///Encoded blobs of data
-    pub encoded_data: Vec<(CipherText, Vec<u8>, Tag)>,
-    ///Transaction senders ephemeral pub key
-    pub ephemeral_pub_key: Vec<u8>,
-    ///Public (Pedersen) commitment
-    pub commitment: Vec<PedersenCommitment>,
-    ///tweak
-    pub tweak: Tweak,
-    ///secret_r
-    pub secret_r: [u8; 32],
-    ///Hex-encoded address of a smart contract account called
-    pub sc_addr: String,
+    pub encoded_transaction_data: Vec<u8>,
+}
+
+impl From<NSSATransaction> for EncodedTransaction {
+    fn from(value: NSSATransaction) -> Self {
+        match value {
+            NSSATransaction::Public(tx) => Self {
+                tx_kind: TxKind::Public,
+                encoded_transaction_data: tx.to_bytes(),
+            },
+            NSSATransaction::PrivacyPreserving(tx) => Self {
+                tx_kind: TxKind::PrivacyPreserving,
+                encoded_transaction_data: tx.to_bytes(),
+            },
+        }
+    }
+}
+
+impl TryFrom<&EncodedTransaction> for NSSATransaction {
+    type Error = nssa::error::NssaError;
+
+    fn try_from(value: &EncodedTransaction) -> Result<Self, Self::Error> {
+        match value.tx_kind {
+            TxKind::Public => nssa::PublicTransaction::from_bytes(&value.encoded_transaction_data)
+                .map(|tx| tx.into()),
+            TxKind::PrivacyPreserving => {
+                nssa::PrivacyPreservingTransaction::from_bytes(&value.encoded_transaction_data)
+                    .map(|tx| tx.into())
+            }
+        }
+    }
 }
 
 #[derive(Debug, Serialize, Deserialize)]
@@ -153,7 +171,7 @@ impl ActionData {
     }
 }
 
-impl TransactionBody {
+impl EncodedTransaction {
     /// Computes and returns the SHA-256 hash of the JSON-serialized representation of `self`.
     pub fn hash(&self) -> TreeHashType {
         let bytes_to_hash = self.to_bytes();
@@ -162,180 +180,48 @@ impl TransactionBody {
         TreeHashType::from(hasher.finalize_fixed())
     }
 
-    fn to_bytes(&self) -> Vec<u8> {
+    pub fn to_bytes(&self) -> Vec<u8> {
         // TODO: Remove `unwrap` by implementing a `to_bytes` method
         // that deterministically encodes all transaction fields to bytes
         // and guarantees serialization will succeed.
         serde_json::to_vec(&self).unwrap()
     }
 
+    pub fn from_bytes(bytes: Vec<u8>) -> Self {
+        serde_json::from_slice(&bytes).unwrap()
+    }
+
     pub fn log(&self) {
         info!("Transaction hash is {:?}", hex::encode(self.hash()));
         info!("Transaction tx_kind is {:?}", self.tx_kind);
-        info!("Transaction execution_input is {:?}", {
-            if let Ok(action) = serde_json::from_slice::<ActionData>(&self.execution_input) {
-                action.into_hexed_print()
-            } else {
-                "".to_string()
-            }
-        });
-        info!("Transaction execution_output is {:?}", {
-            if let Ok(action) = serde_json::from_slice::<ActionData>(&self.execution_output) {
-                action.into_hexed_print()
-            } else {
-                "".to_string()
-            }
-        });
-        info!(
-            "Transaction utxo_commitments_spent_hashes is {:?}",
-            self.utxo_commitments_spent_hashes
-                .iter()
-                .map(|val| hex::encode(*val))
-                .collect::<Vec<_>>()
-        );
-        info!(
-            "Transaction utxo_commitments_created_hashes is {:?}",
-            self.utxo_commitments_created_hashes
-                .iter()
-                .map(|val| hex::encode(*val))
-                .collect::<Vec<_>>()
-        );
-        info!(
-            "Transaction nullifier_created_hashes is {:?}",
-            self.nullifier_created_hashes
-                .iter()
-                .map(|val| hex::encode(*val))
-                .collect::<Vec<_>>()
-        );
-        info!(
-            "Transaction encoded_data is {:?}",
-            self.encoded_data
-                .iter()
-                .map(|val| (hex::encode(val.0.clone()), hex::encode(val.1.clone())))
-                .collect::<Vec<_>>()
-        );
-        info!(
-            "Transaction ephemeral_pub_key is {:?}",
-            hex::encode(self.ephemeral_pub_key.clone())
-        );
     }
 }
 
-type TransactionHash = [u8; 32];
 pub type TransactionSignature = Signature;
 pub type SignaturePublicKey = VerifyingKey;
 pub type SignaturePrivateKey = SigningKey;
 
-/// A container for a transaction body with a signature.
-/// Meant to be sent through the network to the sequencer
-#[derive(Debug, Serialize, Deserialize, Clone, PartialEq, Eq)]
-pub struct Transaction {
-    body: TransactionBody,
-    pub signature: TransactionSignature,
-    pub public_key: VerifyingKey,
-}
-
-impl Transaction {
-    /// Returns a new transaction signed with the provided `private_key`.
-    /// The signature is generated over the hash of the body as computed by `body.hash()`
-    pub fn new(body: TransactionBody, private_key: SigningKey) -> Transaction {
-        let signature: TransactionSignature = private_key.sign(&body.to_bytes());
-        let public_key = VerifyingKey::from(&private_key);
-        Self {
-            body,
-            signature,
-            public_key,
-        }
-    }
-
-    /// Converts the transaction into an `AuthenticatedTransaction` by verifying its signature.
-    /// Returns an error if the signature verification fails.
-    pub fn into_authenticated(self) -> Result<AuthenticatedTransaction, TransactionSignatureError> {
-        let hash = self.body.hash();
-
-        self.public_key
-            .verify(&self.body.to_bytes(), &self.signature)
-            .map_err(|_| TransactionSignatureError::InvalidSignature)?;
-
-        Ok(AuthenticatedTransaction {
-            hash,
-            transaction: self,
-        })
-    }
-
-    /// Returns the body of the transaction
-    pub fn body(&self) -> &TransactionBody {
-        &self.body
-    }
-}
-
-/// A transaction with a valid signature over the hash of its body.
-/// Can only be constructed from an `Transaction`
-/// if the signature is valid
-#[derive(Debug, Clone)]
-pub struct AuthenticatedTransaction {
-    hash: TransactionHash,
-    transaction: Transaction,
-}
-
-impl AuthenticatedTransaction {
-    /// Returns the underlying transaction
-    pub fn transaction(&self) -> &Transaction {
-        &self.transaction
-    }
-
-    pub fn into_transaction(self) -> Transaction {
-        self.transaction
-    }
-
-    /// Returns the precomputed hash over the body of the transaction
-    pub fn hash(&self) -> &TransactionHash {
-        &self.hash
-    }
-}
-
 #[cfg(test)]
 mod tests {
-    use super::*;
-    use k256::{FieldBytes, ecdsa::signature::Signer};
-    use secp256k1_zkp::{Tweak, constants::SECRET_KEY_SIZE};
     use sha2::{Digest, digest::FixedOutput};
 
     use crate::{
-        merkle_tree_public::TreeHashType,
-        transaction::{Transaction, TransactionBody, TxKind},
+        TreeHashType,
+        transaction::{EncodedTransaction, TxKind},
     };
 
-    fn test_transaction_body() -> TransactionBody {
-        TransactionBody {
+    fn test_transaction_body() -> EncodedTransaction {
+        EncodedTransaction {
             tx_kind: TxKind::Public,
-            execution_input: vec![1, 2, 3, 4],
-            execution_output: vec![5, 6, 7, 8],
-            utxo_commitments_spent_hashes: vec![[9; 32], [10; 32], [11; 32], [12; 32]],
-            utxo_commitments_created_hashes: vec![[13; 32]],
-            nullifier_created_hashes: vec![[0; 32], [1; 32], [2; 32], [3; 32]],
-            execution_proof_private: "loremipsum".to_string(),
-            encoded_data: vec![(vec![255, 255, 255], vec![254, 254, 254], 1)],
-            ephemeral_pub_key: vec![5; 32],
-            commitment: vec![],
-            tweak: Tweak::from_slice(&[7; SECRET_KEY_SIZE]).unwrap(),
-            secret_r: [8; 32],
-            sc_addr: "someAddress".to_string(),
+            encoded_transaction_data: vec![1, 2, 3, 4],
         }
     }
 
-    fn test_transaction() -> Transaction {
-        let body = test_transaction_body();
-        let key_bytes = FieldBytes::from_slice(&[37; 32]);
-        let private_key: SigningKey = SigningKey::from_bytes(key_bytes).unwrap();
-        Transaction::new(body, private_key)
-    }
-
     #[test]
     fn test_transaction_hash_is_sha256_of_json_bytes() {
         let body = test_transaction_body();
         let expected_hash = {
-            let data = serde_json::to_vec(&body).unwrap();
+            let data = body.to_bytes();
             let mut hasher = sha2::Sha256::new();
             hasher.update(&data);
             TreeHashType::from(hasher.finalize_fixed())
@@ -347,83 +233,12 @@ mod tests {
     }
 
     #[test]
-    fn test_transaction_constructor() {
+    fn test_to_bytes_from_bytes() {
         let body = test_transaction_body();
-        let key_bytes = FieldBytes::from_slice(&[37; 32]);
-        let private_key: SigningKey = SigningKey::from_bytes(key_bytes).unwrap();
-        let transaction = Transaction::new(body.clone(), private_key.clone());
-        assert_eq!(
-            transaction.public_key,
-            SignaturePublicKey::from(&private_key)
-        );
-        assert_eq!(transaction.body, body);
-    }
 
-    #[test]
-    fn test_transaction_body_getter() {
-        let body = test_transaction_body();
-        let key_bytes = FieldBytes::from_slice(&[37; 32]);
-        let private_key: SigningKey = SigningKey::from_bytes(key_bytes).unwrap();
-        let transaction = Transaction::new(body.clone(), private_key.clone());
-        assert_eq!(transaction.body(), &body);
-    }
+        let body_bytes = body.to_bytes();
+        let body_new = EncodedTransaction::from_bytes(body_bytes);
 
-    #[test]
-    fn test_into_authenticated_succeeds_for_valid_signature() {
-        let transaction = test_transaction();
-        let authenticated_tx = transaction.clone().into_authenticated().unwrap();
-
-        let signature = authenticated_tx.transaction().signature;
-        let hash = authenticated_tx.hash();
-
-        assert_eq!(authenticated_tx.transaction(), &transaction);
-        assert_eq!(hash, &transaction.body.hash());
-        assert!(
-            authenticated_tx
-                .transaction()
-                .public_key
-                .verify(&transaction.body.to_bytes(), &signature)
-                .is_ok()
-        );
-    }
-
-    #[test]
-    fn test_into_authenticated_fails_for_invalid_signature() {
-        let body = test_transaction_body();
-        let key_bytes = FieldBytes::from_slice(&[37; 32]);
-        let private_key: SigningKey = SigningKey::from_bytes(key_bytes).unwrap();
-        let transaction = {
-            let mut this = Transaction::new(body, private_key.clone());
-            // Modify the signature to make it invalid
-            // We do this by changing it to the signature of something else
-            this.signature = private_key.sign(b"deadbeef");
-            this
-        };
-
-        matches!(
-            transaction.into_authenticated(),
-            Err(TransactionSignatureError::InvalidSignature)
-        );
-    }
-
-    #[test]
-    fn test_authenticated_transaction_getter() {
-        let transaction = test_transaction();
-        let authenticated_tx = transaction.clone().into_authenticated().unwrap();
-        assert_eq!(authenticated_tx.transaction(), &transaction);
-    }
-
-    #[test]
-    fn test_authenticated_transaction_hash_getter() {
-        let transaction = test_transaction();
-        let authenticated_tx = transaction.clone().into_authenticated().unwrap();
-        assert_eq!(authenticated_tx.hash(), &transaction.body.hash());
-    }
-
-    #[test]
-    fn test_authenticated_transaction_into_transaction() {
-        let transaction = test_transaction();
-        let authenticated_tx = transaction.clone().into_authenticated().unwrap();
-        assert_eq!(authenticated_tx.into_transaction(), transaction);
+        assert_eq!(body, body_new);
     }
 }
diff --git a/common/src/utxo_commitment.rs b/common/src/utxo_commitment.rs
index 75c0543..1b42421 100644
--- a/common/src/utxo_commitment.rs
+++ b/common/src/utxo_commitment.rs
@@ -1,6 +1,6 @@
 use serde::{Deserialize, Serialize};
 
-use crate::merkle_tree_public::TreeHashType;
+use crate::TreeHashType;
 
 //ToDo: Update UTXO Commitment model, when it is clear
 #[derive(Debug, Serialize, Deserialize, Clone)]
diff --git a/integration_tests/Cargo.toml b/integration_tests/Cargo.toml
index c3e2601..fc3da12 100644
--- a/integration_tests/Cargo.toml
+++ b/integration_tests/Cargo.toml
@@ -21,6 +21,7 @@ workspace = true
 
 [dependencies.sequencer_core]
 path = "../sequencer_core"
+features = ["testnet"]
 
 [dependencies.sequencer_runner]
 path = "../sequencer_runner"
diff --git a/integration_tests/configs/debug/sequencer/sequencer_config.json b/integration_tests/configs/debug/sequencer/sequencer_config.json
index 37bfd0a..3317a11 100644
--- a/integration_tests/configs/debug/sequencer/sequencer_config.json
+++ b/integration_tests/configs/debug/sequencer/sequencer_config.json
@@ -15,5 +15,7 @@
             "addr": "4d4b6cd1361032ca9bd2aeb9d900aa4d45d9ead80ac9423374c451a7254d0766",
             "balance": 20000
         }
-    ]
+    ],
+    "signing_key": [37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 37, 
+37, 37, 37, 37, 37, 37]
 }
diff --git a/integration_tests/src/lib.rs b/integration_tests/src/lib.rs
index 1646ee6..dea293e 100644
--- a/integration_tests/src/lib.rs
+++ b/integration_tests/src/lib.rs
@@ -273,21 +273,10 @@ pub async fn test_success_two_transactions() {
     info!("Second TX Success!");
 }
 
-pub async fn test_get_account_wallet_command() {
-    let command = Command::GetAccount {
-        addr: ACC_SENDER.to_string(),
-    };
-
+pub async fn test_get_account() {
     let wallet_config = fetch_config().unwrap();
-
     let seq_client = SequencerClient::new(wallet_config.sequencer_addr.clone()).unwrap();
 
-    wallet::execute_subcommand(command).await.unwrap();
-
-    info!("Waiting for next block creation");
-    tokio::time::sleep(Duration::from_secs(TIME_TO_WAIT_FOR_BLOCK_SECONDS)).await;
-
-    info!("Checking correct account");
     let account = seq_client
         .get_account(ACC_SENDER.to_string())
         .await
@@ -444,6 +433,50 @@ pub async fn test_success_token_program() {
     );
 }
 
+pub async fn test_pinata() {
+    let pinata_addr = "cafe".repeat(16);
+    let pinata_prize = 150;
+    let solution = 989106;
+    let command = Command::ClaimPinata {
+        pinata_addr: pinata_addr.clone(),
+        winner_addr: ACC_SENDER.to_string(),
+        solution,
+    };
+
+    let wallet_config = fetch_config().unwrap();
+
+    let seq_client = SequencerClient::new(wallet_config.sequencer_addr.clone()).unwrap();
+
+    let pinata_balance_pre = seq_client
+        .get_account_balance(pinata_addr.clone())
+        .await
+        .unwrap()
+        .balance;
+
+    wallet::execute_subcommand(command).await.unwrap();
+
+    info!("Waiting for next block creation");
+    tokio::time::sleep(Duration::from_secs(TIME_TO_WAIT_FOR_BLOCK_SECONDS)).await;
+
+    info!("Checking correct balance move");
+    let pinata_balance_post = seq_client
+        .get_account_balance(pinata_addr.clone())
+        .await
+        .unwrap()
+        .balance;
+
+    let winner_balance_post = seq_client
+        .get_account_balance(ACC_SENDER.to_string())
+        .await
+        .unwrap()
+        .balance;
+
+    assert_eq!(pinata_balance_post, pinata_balance_pre - pinata_prize);
+    assert_eq!(winner_balance_post, 10000 + pinata_prize);
+
+    info!("Success!");
+}
+
 macro_rules! test_cleanup_wrap {
     ($home_dir:ident, $test_func:ident) => {{
         let res = pre_test($home_dir.clone()).await.unwrap();
@@ -479,19 +512,23 @@ pub async fn main_tests_runner() -> Result<()> {
         "test_failure" => {
             test_cleanup_wrap!(home_dir, test_failure);
         }
-        "test_get_account_wallet_command" => {
-            test_cleanup_wrap!(home_dir, test_get_account_wallet_command);
+        "test_get_account" => {
+            test_cleanup_wrap!(home_dir, test_get_account);
         }
         "test_success_two_transactions" => {
             test_cleanup_wrap!(home_dir, test_success_two_transactions);
         }
+        "test_pinata" => {
+            test_cleanup_wrap!(home_dir, test_pinata);
+        }
         "all" => {
             test_cleanup_wrap!(home_dir, test_success_move_to_another_account);
             test_cleanup_wrap!(home_dir, test_success);
             test_cleanup_wrap!(home_dir, test_failure);
             test_cleanup_wrap!(home_dir, test_success_two_transactions);
-            test_cleanup_wrap!(home_dir, test_get_account_wallet_command);
             test_cleanup_wrap!(home_dir, test_success_token_program);
+            test_cleanup_wrap!(home_dir, test_pinata);
+            test_cleanup_wrap!(home_dir, test_get_account);
         }
         _ => {
             anyhow::bail!("Unknown test name");
diff --git a/key_protocol/Cargo.toml b/key_protocol/Cargo.toml
index ba8edc7..d453753 100644
--- a/key_protocol/Cargo.toml
+++ b/key_protocol/Cargo.toml
@@ -15,6 +15,9 @@ elliptic-curve.workspace = true
 hex.workspace = true
 aes-gcm.workspace = true
 lazy_static.workspace = true
+bip39.workspace = true
+hmac-sha512.workspace = true
+nssa-core = { path = "../nssa/core", features = ["host"] }
 
 [dependencies.common]
 path = "../common"
diff --git a/key_protocol/src/key_management/constants_types.rs b/key_protocol/src/key_management/constants_types.rs
deleted file mode 100644
index f4fca86..0000000
--- a/key_protocol/src/key_management/constants_types.rs
+++ /dev/null
@@ -1,22 +0,0 @@
-use elliptic_curve::{
-    consts::{B0, B1},
-    generic_array::GenericArray,
-};
-use lazy_static::lazy_static;
-use sha2::digest::typenum::{UInt, UTerm};
-
-lazy_static! {
-    pub static ref NULLIFIER_SECRET_CONST: [u8; 32] =
-        hex::decode(std::env::var("NULLIFIER_SECRET_CONST").unwrap())
-            .unwrap()
-            .try_into()
-            .unwrap();
-    pub static ref VIEWING_SECRET_CONST: [u8; 32] =
-        hex::decode(std::env::var("VIEWING_SECRET_CONST").unwrap())
-            .unwrap()
-            .try_into()
-            .unwrap();
-}
-
-pub type CipherText = Vec<u8>;
-pub type Nonce = GenericArray<u8, UInt<UInt<UInt<UInt<UTerm, B1>, B1>, B0>, B0>>;
diff --git a/key_protocol/src/key_management/ephemeral_key_holder.rs b/key_protocol/src/key_management/ephemeral_key_holder.rs
index b304292..b4835ff 100644
--- a/key_protocol/src/key_management/ephemeral_key_holder.rs
+++ b/key_protocol/src/key_management/ephemeral_key_holder.rs
@@ -1,50 +1,52 @@
-use aes_gcm::{AeadCore, Aes256Gcm, KeyInit, aead::Aead};
-use elliptic_curve::PrimeField;
-use elliptic_curve::point::AffineCoordinates;
-use k256::{AffinePoint, FieldBytes, Scalar};
 use log::info;
-use rand::{RngCore, rngs::OsRng};
+use nssa_core::{
+    NullifierPublicKey, SharedSecretKey,
+    encryption::{EphemeralPublicKey, EphemeralSecretKey, IncomingViewingPublicKey},
+};
+use sha2::Digest;
 
-use super::constants_types::{CipherText, Nonce};
+use crate::key_management::secret_holders::OutgoingViewingSecretKey;
 
 #[derive(Debug)]
 ///Ephemeral secret key holder. Non-clonable as intended for one-time use. Produces ephemeral public keys. Can produce shared secret for sender.
 pub struct EphemeralKeyHolder {
-    ephemeral_secret_key: Scalar,
+    ephemeral_secret_key: EphemeralSecretKey,
 }
 
 impl EphemeralKeyHolder {
-    pub fn new_os_random() -> Self {
-        let mut bytes = FieldBytes::default();
+    pub fn new(
+        receiver_nullifier_public_key: NullifierPublicKey,
+        sender_outgoing_viewing_secret_key: OutgoingViewingSecretKey,
+        nonce: u64,
+    ) -> Self {
+        let mut hasher = sha2::Sha256::new();
+        hasher.update(receiver_nullifier_public_key);
+        hasher.update(nonce.to_le_bytes());
+        hasher.update([0; 24]);
 
-        OsRng.fill_bytes(&mut bytes);
+        let hash_recepient = hasher.finalize();
+
+        let mut hasher = sha2::Sha256::new();
+        hasher.update(sender_outgoing_viewing_secret_key);
+        hasher.update(hash_recepient);
 
         Self {
-            ephemeral_secret_key: Scalar::from_repr(bytes).unwrap(),
+            ephemeral_secret_key: hasher.finalize().into(),
         }
     }
 
-    pub fn generate_ephemeral_public_key(&self) -> AffinePoint {
-        (AffinePoint::GENERATOR * self.ephemeral_secret_key).into()
+    pub fn generate_ephemeral_public_key(&self) -> EphemeralPublicKey {
+        EphemeralPublicKey::from_scalar(self.ephemeral_secret_key)
     }
 
     pub fn calculate_shared_secret_sender(
         &self,
-        viewing_public_key_receiver: AffinePoint,
-    ) -> AffinePoint {
-        (viewing_public_key_receiver * self.ephemeral_secret_key).into()
-    }
-
-    pub fn encrypt_data(
-        &self,
-        viewing_public_key_receiver: AffinePoint,
-        data: &[u8],
-    ) -> (CipherText, Nonce) {
-        let shared_secret = self.calculate_shared_secret_sender(viewing_public_key_receiver);
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-        let nonce = Aes256Gcm::generate_nonce(&mut OsRng);
-
-        (cipher.encrypt(&nonce, data).unwrap(), nonce)
+        receiver_incoming_viewing_public_key: IncomingViewingPublicKey,
+    ) -> SharedSecretKey {
+        SharedSecretKey::new(
+            &self.ephemeral_secret_key,
+            &receiver_incoming_viewing_public_key,
+        )
     }
 
     pub fn log(&self) {
diff --git a/key_protocol/src/key_management/mod.rs b/key_protocol/src/key_management/mod.rs
index 1a037ef..5f5f2aa 100644
--- a/key_protocol/src/key_management/mod.rs
+++ b/key_protocol/src/key_management/mod.rs
@@ -1,29 +1,25 @@
-use std::collections::HashMap;
-
-use aes_gcm::{Aes256Gcm, KeyInit, aead::Aead};
-use constants_types::{CipherText, Nonce};
-use elliptic_curve::point::AffineCoordinates;
-use k256::AffinePoint;
+use common::TreeHashType;
 use log::info;
-use secret_holders::{SeedHolder, TopSecretKeyHolder, UTXOSecretKeyHolder};
+use nssa_core::{
+    NullifierPublicKey, SharedSecretKey,
+    encryption::{EphemeralPublicKey, IncomingViewingPublicKey},
+};
+use secret_holders::{PrivateKeyHolder, SecretSpendingKey, SeedHolder};
 use serde::{Deserialize, Serialize};
+use sha2::{Digest, digest::FixedOutput};
 
-use crate::key_protocol_core::PublicKey;
 pub type PublicAccountSigningKey = [u8; 32];
 
-pub mod constants_types;
 pub mod ephemeral_key_holder;
 pub mod secret_holders;
 
 #[derive(Serialize, Deserialize, Clone, Debug)]
 ///Entrypoint to key management
 pub struct KeyChain {
-    top_secret_key_holder: TopSecretKeyHolder,
-    pub utxo_secret_key_holder: UTXOSecretKeyHolder,
-    ///Map for all users accounts
-    pub pub_account_signing_keys: HashMap<nssa::Address, nssa::PrivateKey>,
-    pub nullifer_public_key: PublicKey,
-    pub viewing_public_key: PublicKey,
+    secret_spending_key: SecretSpendingKey,
+    pub private_key_holder: PrivateKeyHolder,
+    pub nullifer_public_key: NullifierPublicKey,
+    pub incoming_viewing_public_key: IncomingViewingPublicKey,
 }
 
 impl KeyChain {
@@ -31,95 +27,61 @@ impl KeyChain {
         //Currently dropping SeedHolder at the end of initialization.
         //Now entirely sure if we need it in the future.
         let seed_holder = SeedHolder::new_os_random();
-        let top_secret_key_holder = seed_holder.produce_top_secret_key_holder();
+        let secret_spending_key = seed_holder.produce_top_secret_key_holder();
 
-        let utxo_secret_key_holder = top_secret_key_holder.produce_utxo_secret_holder();
+        let private_key_holder = secret_spending_key.produce_private_key_holder();
 
-        let nullifer_public_key = utxo_secret_key_holder.generate_nullifier_public_key();
-        let viewing_public_key = utxo_secret_key_holder.generate_viewing_public_key();
+        let nullifer_public_key = private_key_holder.generate_nullifier_public_key();
+        let incoming_viewing_public_key = private_key_holder.generate_incoming_viewing_public_key();
 
         Self {
-            top_secret_key_holder,
-            utxo_secret_key_holder,
+            secret_spending_key,
+            private_key_holder,
             nullifer_public_key,
-            viewing_public_key,
-            pub_account_signing_keys: HashMap::new(),
+            incoming_viewing_public_key,
         }
     }
 
-    pub fn new_os_random_with_accounts(accounts: HashMap<nssa::Address, nssa::PrivateKey>) -> Self {
-        //Currently dropping SeedHolder at the end of initialization.
-        //Now entirely sure if we need it in the future.
-        let seed_holder = SeedHolder::new_os_random();
-        let top_secret_key_holder = seed_holder.produce_top_secret_key_holder();
+    pub fn produce_user_address(&self) -> [u8; 32] {
+        let mut hasher = sha2::Sha256::new();
 
-        let utxo_secret_key_holder = top_secret_key_holder.produce_utxo_secret_holder();
+        hasher.update(&self.nullifer_public_key);
+        hasher.update(self.incoming_viewing_public_key.to_bytes());
 
-        let nullifer_public_key = utxo_secret_key_holder.generate_nullifier_public_key();
-        let viewing_public_key = utxo_secret_key_holder.generate_viewing_public_key();
-
-        Self {
-            top_secret_key_holder,
-            utxo_secret_key_holder,
-            nullifer_public_key,
-            viewing_public_key,
-            pub_account_signing_keys: accounts,
-        }
-    }
-
-    pub fn generate_new_private_key(&mut self) -> nssa::Address {
-        let private_key = nssa::PrivateKey::new_os_random();
-        let address = nssa::Address::from(&nssa::PublicKey::new_from_private_key(&private_key));
-
-        self.pub_account_signing_keys.insert(address, private_key);
-
-        address
-    }
-
-    /// Returns the signing key for public transaction signatures
-    pub fn get_pub_account_signing_key(
-        &self,
-        address: &nssa::Address,
-    ) -> Option<&nssa::PrivateKey> {
-        self.pub_account_signing_keys.get(address)
+        <TreeHashType>::from(hasher.finalize_fixed())
     }
 
     pub fn calculate_shared_secret_receiver(
         &self,
-        ephemeral_public_key_sender: AffinePoint,
-    ) -> AffinePoint {
-        (ephemeral_public_key_sender * self.utxo_secret_key_holder.viewing_secret_key).into()
-    }
-
-    pub fn decrypt_data(
-        &self,
-        ephemeral_public_key_sender: AffinePoint,
-        ciphertext: CipherText,
-        nonce: Nonce,
-    ) -> Result<Vec<u8>, aes_gcm::Error> {
-        let shared_secret = self.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-
-        cipher.decrypt(&nonce, ciphertext.as_slice())
+        ephemeral_public_key_sender: EphemeralPublicKey,
+    ) -> SharedSecretKey {
+        SharedSecretKey::new(
+            &self
+                .secret_spending_key
+                .generate_incoming_viewing_secret_key(),
+            &ephemeral_public_key_sender,
+        )
     }
 
     pub fn log(&self) {
         info!(
             "Secret spending key is {:?}",
-            hex::encode(
-                serde_json::to_vec(&self.top_secret_key_holder.secret_spending_key).unwrap()
-            ),
+            hex::encode(serde_json::to_vec(&self.secret_spending_key).unwrap()),
         );
         info!(
             "Nulifier secret key is {:?}",
+            hex::encode(serde_json::to_vec(&self.private_key_holder.nullifier_secret_key).unwrap()),
+        );
+        info!(
+            "Viewing secret key is {:?}",
             hex::encode(
-                serde_json::to_vec(&self.utxo_secret_key_holder.nullifier_secret_key).unwrap()
+                serde_json::to_vec(&self.private_key_holder.incoming_viewing_secret_key).unwrap()
             ),
         );
         info!(
             "Viewing secret key is {:?}",
             hex::encode(
-                serde_json::to_vec(&self.utxo_secret_key_holder.viewing_secret_key).unwrap()
+                serde_json::to_vec(&self.private_key_holder.outgoing_viewing_secret_key).unwrap()
             ),
         );
         info!(
@@ -128,25 +90,16 @@ impl KeyChain {
         );
         info!(
             "Viewing public key is {:?}",
-            hex::encode(serde_json::to_vec(&self.viewing_public_key).unwrap()),
+            hex::encode(serde_json::to_vec(&self.incoming_viewing_public_key).unwrap()),
         );
     }
 }
 
 #[cfg(test)]
 mod tests {
-    use aes_gcm::{
-        Aes256Gcm,
-        aead::{Aead, KeyInit, OsRng},
-    };
-    use constants_types::{CipherText, Nonce};
-    use constants_types::{NULLIFIER_SECRET_CONST, VIEWING_SECRET_CONST};
-    use elliptic_curve::ff::Field;
-    use elliptic_curve::group::prime::PrimeCurveAffine;
-    use elliptic_curve::point::AffineCoordinates;
-    use k256::{AffinePoint, ProjectivePoint, Scalar};
-
-    use crate::key_management::ephemeral_key_holder::EphemeralKeyHolder;
+    use aes_gcm::aead::OsRng;
+    use k256::AffinePoint;
+    use rand::RngCore;
 
     use super::*;
 
@@ -156,12 +109,7 @@ mod tests {
         let address_key_holder = KeyChain::new_os_random();
 
         // Check that key holder fields are initialized with expected types
-        assert!(!Into::<bool>::into(
-            address_key_holder.nullifer_public_key.is_identity()
-        ));
-        assert!(!Into::<bool>::into(
-            address_key_holder.viewing_public_key.is_identity()
-        ));
+        assert_ne!(address_key_holder.nullifer_public_key.as_ref(), &[0u8; 32]);
     }
 
     #[test]
@@ -169,176 +117,13 @@ mod tests {
         let address_key_holder = KeyChain::new_os_random();
 
         // Generate a random ephemeral public key sender
-        let scalar = Scalar::random(&mut OsRng);
-        let ephemeral_public_key_sender = (ProjectivePoint::GENERATOR * scalar).to_affine();
+        let mut scalar = [0; 32];
+        OsRng.fill_bytes(&mut scalar);
+        let ephemeral_public_key_sender = EphemeralPublicKey::from_scalar(scalar);
 
         // Calculate shared secret
-        let shared_secret =
+        let _shared_secret =
             address_key_holder.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-
-        // Ensure the shared secret is not an identity point (suggesting non-zero output)
-        assert!(!Into::<bool>::into(shared_secret.is_identity()));
-    }
-
-    #[test]
-    fn test_decrypt_data() {
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Generate an ephemeral key and shared secret
-        let ephemeral_public_key_sender =
-            EphemeralKeyHolder::new_os_random().generate_ephemeral_public_key();
-        let shared_secret =
-            address_key_holder.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-
-        // Encrypt sample data
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-        let nonce = Nonce::from_slice(b"unique nonce");
-        let plaintext = b"Sensitive data";
-        let ciphertext = cipher
-            .encrypt(nonce, plaintext.as_ref())
-            .expect("encryption failure");
-
-        // Attempt decryption
-        let decrypted_data: Vec<u8> = address_key_holder
-            .decrypt_data(
-                ephemeral_public_key_sender,
-                CipherText::from(ciphertext),
-                *nonce,
-            )
-            .unwrap();
-
-        // Verify decryption is successful and matches original plaintext
-        assert_eq!(decrypted_data, plaintext);
-    }
-
-    #[test]
-    fn test_new_os_random_initialization() {
-        // Ensure that KeyChain is initialized correctly
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Check that key holder fields are initialized with expected types and values
-        assert!(!Into::<bool>::into(
-            address_key_holder.nullifer_public_key.is_identity()
-        ));
-        assert!(!Into::<bool>::into(
-            address_key_holder.viewing_public_key.is_identity()
-        ));
-    }
-
-    #[test]
-    fn test_calculate_shared_secret_with_identity_point() {
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Use identity point as ephemeral public key
-        let identity_point = AffinePoint::identity();
-
-        // Calculate shared secret
-        let shared_secret = address_key_holder.calculate_shared_secret_receiver(identity_point);
-
-        // The shared secret with the identity point should also result in the identity point
-        assert!(Into::<bool>::into(shared_secret.is_identity()));
-    }
-
-    #[test]
-    #[should_panic]
-    fn test_decrypt_data_with_incorrect_nonce() {
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Generate ephemeral public key and shared secret
-        let scalar = Scalar::random(OsRng);
-        let ephemeral_public_key_sender = (ProjectivePoint::GENERATOR * scalar).to_affine();
-        let shared_secret =
-            address_key_holder.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-
-        // Encrypt sample data with a specific nonce
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-        let nonce = Nonce::from_slice(b"unique nonce");
-        let plaintext = b"Sensitive data";
-        let ciphertext = cipher
-            .encrypt(nonce, plaintext.as_ref())
-            .expect("encryption failure");
-
-        // Attempt decryption with an incorrect nonce
-        let incorrect_nonce = Nonce::from_slice(b"wrong nonce");
-        let decrypted_data = address_key_holder
-            .decrypt_data(
-                ephemeral_public_key_sender,
-                CipherText::from(ciphertext.clone()),
-                *incorrect_nonce,
-            )
-            .unwrap();
-
-        // The decryption should fail or produce incorrect output due to nonce mismatch
-        assert_ne!(decrypted_data, plaintext);
-    }
-
-    #[test]
-    #[should_panic]
-    fn test_decrypt_data_with_incorrect_ciphertext() {
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Generate ephemeral public key and shared secret
-        let scalar = Scalar::random(OsRng);
-        let ephemeral_public_key_sender = (ProjectivePoint::GENERATOR * scalar).to_affine();
-        let shared_secret =
-            address_key_holder.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-
-        // Encrypt sample data
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-        let nonce = Nonce::from_slice(b"unique nonce");
-        let plaintext = b"Sensitive data";
-        let ciphertext = cipher
-            .encrypt(nonce, plaintext.as_ref())
-            .expect("encryption failure");
-
-        // Tamper with the ciphertext to simulate corruption
-        let mut corrupted_ciphertext = ciphertext.clone();
-        corrupted_ciphertext[0] ^= 1; // Flip a bit in the ciphertext
-
-        // Attempt decryption
-        let result = address_key_holder
-            .decrypt_data(
-                ephemeral_public_key_sender,
-                CipherText::from(corrupted_ciphertext),
-                *nonce,
-            )
-            .unwrap();
-
-        // The decryption should fail or produce incorrect output due to tampered ciphertext
-        assert_ne!(result, plaintext);
-    }
-
-    #[test]
-    fn test_encryption_decryption_round_trip() {
-        let address_key_holder = KeyChain::new_os_random();
-
-        // Generate ephemeral key and shared secret
-        let scalar = Scalar::random(OsRng);
-        let ephemeral_public_key_sender = (ProjectivePoint::GENERATOR * scalar).to_affine();
-
-        // Encrypt sample data
-        let plaintext = b"Round-trip test data";
-        let nonce = Nonce::from_slice(b"unique nonce");
-
-        let shared_secret =
-            address_key_holder.calculate_shared_secret_receiver(ephemeral_public_key_sender);
-        let cipher = Aes256Gcm::new(&shared_secret.x());
-
-        let ciphertext = cipher
-            .encrypt(nonce, plaintext.as_ref())
-            .expect("encryption failure");
-
-        // Decrypt the data using the `KeyChain` instance
-        let decrypted_data = address_key_holder
-            .decrypt_data(
-                ephemeral_public_key_sender,
-                CipherText::from(ciphertext),
-                *nonce,
-            )
-            .unwrap();
-
-        // Verify the decrypted data matches the original plaintext
-        assert_eq!(decrypted_data, plaintext);
     }
 
     #[test]
@@ -346,10 +131,10 @@ mod tests {
         let seed_holder = SeedHolder::new_os_random();
         let top_secret_key_holder = seed_holder.produce_top_secret_key_holder();
 
-        let utxo_secret_key_holder = top_secret_key_holder.produce_utxo_secret_holder();
+        let utxo_secret_key_holder = top_secret_key_holder.produce_private_key_holder();
 
         let nullifer_public_key = utxo_secret_key_holder.generate_nullifier_public_key();
-        let viewing_public_key = utxo_secret_key_holder.generate_viewing_public_key();
+        let viewing_public_key = utxo_secret_key_holder.generate_incoming_viewing_public_key();
 
         let pub_account_signing_key = nssa::PrivateKey::new_os_random();
 
@@ -364,11 +149,6 @@ mod tests {
             "Group generator {:?}",
             hex::encode(serde_json::to_vec(&AffinePoint::GENERATOR).unwrap())
         );
-        println!(
-            "Nullifier constant {:?}",
-            hex::encode(*NULLIFIER_SECRET_CONST)
-        );
-        println!("Viewing constatnt {:?}", hex::encode(*VIEWING_SECRET_CONST));
         println!();
 
         println!("======Holders======");
diff --git a/key_protocol/src/key_management/secret_holders.rs b/key_protocol/src/key_management/secret_holders.rs
index c6b2948..80ec1b0 100644
--- a/key_protocol/src/key_management/secret_holders.rs
+++ b/key_protocol/src/key_management/secret_holders.rs
@@ -1,101 +1,157 @@
-use common::merkle_tree_public::TreeHashType;
-use elliptic_curve::PrimeField;
-use k256::{AffinePoint, FieldBytes, Scalar};
+use bip39::Mnemonic;
+use common::TreeHashType;
+use nssa_core::{
+    NullifierPublicKey, NullifierSecretKey,
+    encryption::{IncomingViewingPublicKey, Scalar},
+};
 use rand::{RngCore, rngs::OsRng};
 use serde::{Deserialize, Serialize};
 use sha2::{Digest, digest::FixedOutput};
 
-use super::constants_types::{NULLIFIER_SECRET_CONST, VIEWING_SECRET_CONST};
-
 #[derive(Debug)]
 ///Seed holder. Non-clonable to ensure that different holders use different seeds.
 /// Produces `TopSecretKeyHolder` objects.
 pub struct SeedHolder {
-    seed: Scalar,
+    //ToDo: Needs to be vec as serde derives is not implemented for [u8; 64]
+    pub(crate) seed: Vec<u8>,
 }
 
 #[derive(Serialize, Deserialize, Debug, Clone)]
-///Secret spending key holder. Produces `UTXOSecretKeyHolder` objects.
-pub struct TopSecretKeyHolder {
-    pub secret_spending_key: Scalar,
-}
+///Secret spending key object. Can produce `PrivateKeyHolder` objects.
+pub struct SecretSpendingKey(pub(crate) [u8; 32]);
+
+pub type IncomingViewingSecretKey = Scalar;
+pub type OutgoingViewingSecretKey = Scalar;
 
 #[derive(Serialize, Deserialize, Debug, Clone)]
-///Nullifier secret key and viewing secret key holder. Produces public keys. Can produce address. Can produce shared secret for recepient.
-pub struct UTXOSecretKeyHolder {
-    pub nullifier_secret_key: Scalar,
-    pub viewing_secret_key: Scalar,
+///Private key holder. Produces public keys. Can produce address. Can produce shared secret for recepient.
+pub struct PrivateKeyHolder {
+    pub(crate) nullifier_secret_key: NullifierSecretKey,
+    pub(crate) incoming_viewing_secret_key: IncomingViewingSecretKey,
+    pub(crate) outgoing_viewing_secret_key: OutgoingViewingSecretKey,
 }
 
 impl SeedHolder {
     pub fn new_os_random() -> Self {
-        let mut bytes = FieldBytes::default();
+        let mut enthopy_bytes: [u8; 32] = [0; 32];
+        OsRng.fill_bytes(&mut enthopy_bytes);
 
-        OsRng.fill_bytes(&mut bytes);
+        let mnemonic = Mnemonic::from_entropy(&enthopy_bytes).unwrap();
+        let seed_wide = mnemonic.to_seed("mnemonic");
 
         Self {
-            seed: Scalar::from_repr(bytes).unwrap(),
+            seed: seed_wide.to_vec(),
         }
     }
 
     pub fn generate_secret_spending_key_hash(&self) -> TreeHashType {
+        let mut hash = hmac_sha512::HMAC::mac(&self.seed, "NSSA_seed");
+
+        for _ in 1..2048 {
+            hash = hmac_sha512::HMAC::mac(hash, "NSSA_seed");
+        }
+
+        //Safe unwrap
+        *hash.first_chunk::<32>().unwrap()
+    }
+
+    pub fn produce_top_secret_key_holder(&self) -> SecretSpendingKey {
+        SecretSpendingKey(self.generate_secret_spending_key_hash())
+    }
+}
+
+impl SecretSpendingKey {
+    pub fn generate_nullifier_secret_key(&self) -> NullifierSecretKey {
         let mut hasher = sha2::Sha256::new();
 
-        hasher.update(self.seed.to_bytes());
+        hasher.update("NSSA_keys");
+        hasher.update(self.0);
+        hasher.update([1u8]);
+        hasher.update([0u8; 22]);
+
+        <NullifierSecretKey>::from(hasher.finalize_fixed())
+    }
+
+    pub fn generate_incoming_viewing_secret_key(&self) -> IncomingViewingSecretKey {
+        let mut hasher = sha2::Sha256::new();
+
+        hasher.update("NSSA_keys");
+        hasher.update(self.0);
+        hasher.update([2u8]);
+        hasher.update([0u8; 22]);
 
         <TreeHashType>::from(hasher.finalize_fixed())
     }
 
-    pub fn generate_secret_spending_key_scalar(&self) -> Scalar {
-        let hash = self.generate_secret_spending_key_hash();
-
-        Scalar::from_repr(hash.into()).unwrap()
-    }
-
-    pub fn produce_top_secret_key_holder(&self) -> TopSecretKeyHolder {
-        TopSecretKeyHolder {
-            secret_spending_key: self.generate_secret_spending_key_scalar(),
-        }
-    }
-}
-
-impl TopSecretKeyHolder {
-    pub fn generate_nullifier_secret_key(&self) -> Scalar {
+    pub fn generate_outgoing_viewing_secret_key(&self) -> OutgoingViewingSecretKey {
         let mut hasher = sha2::Sha256::new();
 
-        hasher.update(self.secret_spending_key.to_bytes());
-        hasher.update(*NULLIFIER_SECRET_CONST);
+        hasher.update("NSSA_keys");
+        hasher.update(self.0);
+        hasher.update([3u8]);
+        hasher.update([0u8; 22]);
 
-        let hash = <TreeHashType>::from(hasher.finalize_fixed());
-
-        Scalar::from_repr(hash.into()).unwrap()
+        <TreeHashType>::from(hasher.finalize_fixed())
     }
 
-    pub fn generate_viewing_secret_key(&self) -> Scalar {
-        let mut hasher = sha2::Sha256::new();
-
-        hasher.update(self.secret_spending_key.to_bytes());
-        hasher.update(*VIEWING_SECRET_CONST);
-
-        let hash = <TreeHashType>::from(hasher.finalize_fixed());
-
-        Scalar::from_repr(hash.into()).unwrap()
-    }
-
-    pub fn produce_utxo_secret_holder(&self) -> UTXOSecretKeyHolder {
-        UTXOSecretKeyHolder {
+    pub fn produce_private_key_holder(&self) -> PrivateKeyHolder {
+        PrivateKeyHolder {
             nullifier_secret_key: self.generate_nullifier_secret_key(),
-            viewing_secret_key: self.generate_viewing_secret_key(),
+            incoming_viewing_secret_key: self.generate_incoming_viewing_secret_key(),
+            outgoing_viewing_secret_key: self.generate_outgoing_viewing_secret_key(),
         }
     }
 }
 
-impl UTXOSecretKeyHolder {
-    pub fn generate_nullifier_public_key(&self) -> AffinePoint {
-        (AffinePoint::GENERATOR * self.nullifier_secret_key).into()
+impl PrivateKeyHolder {
+    pub fn generate_nullifier_public_key(&self) -> NullifierPublicKey {
+        (&self.nullifier_secret_key).into()
     }
 
-    pub fn generate_viewing_public_key(&self) -> AffinePoint {
-        (AffinePoint::GENERATOR * self.viewing_secret_key).into()
+    pub fn generate_incoming_viewing_public_key(&self) -> IncomingViewingPublicKey {
+        IncomingViewingPublicKey::from_scalar(self.incoming_viewing_secret_key)
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn seed_generation_test() {
+        let seed_holder = SeedHolder::new_os_random();
+
+        assert_eq!(seed_holder.seed.len(), 64);
+    }
+
+    #[test]
+    fn ssk_generation_test() {
+        let seed_holder = SeedHolder::new_os_random();
+
+        assert_eq!(seed_holder.seed.len(), 64);
+
+        let _ = seed_holder.generate_secret_spending_key_hash();
+    }
+
+    #[test]
+    fn ivs_generation_test() {
+        let seed_holder = SeedHolder::new_os_random();
+
+        assert_eq!(seed_holder.seed.len(), 64);
+
+        let top_secret_key_holder = seed_holder.produce_top_secret_key_holder();
+
+        let _ = top_secret_key_holder.generate_incoming_viewing_secret_key();
+    }
+
+    #[test]
+    fn ovs_generation_test() {
+        let seed_holder = SeedHolder::new_os_random();
+
+        assert_eq!(seed_holder.seed.len(), 64);
+
+        let top_secret_key_holder = seed_holder.produce_top_secret_key_holder();
+
+        let _ = top_secret_key_holder.generate_outgoing_viewing_secret_key();
     }
 }
diff --git a/key_protocol/src/key_protocol_core/mod.rs b/key_protocol/src/key_protocol_core/mod.rs
index 7757183..58f60ce 100644
--- a/key_protocol/src/key_protocol_core/mod.rs
+++ b/key_protocol/src/key_protocol_core/mod.rs
@@ -10,17 +10,14 @@ pub type PublicKey = AffinePoint;
 
 #[derive(Clone, Debug, Serialize, Deserialize)]
 pub struct NSSAUserData {
-    pub key_holder: KeyChain,
+    ///Map for all user public accounts
+    pub pub_account_signing_keys: HashMap<nssa::Address, nssa::PrivateKey>,
+    ///Map for all user private accounts
+    user_private_accounts: HashMap<nssa::Address, KeyChain>,
 }
 
 impl NSSAUserData {
-    pub fn new() -> Self {
-        let key_holder = KeyChain::new_os_random();
-
-        Self { key_holder }
-    }
-
-    fn valid_key_transaction_pairing_check(
+    fn valid_public_key_transaction_pairing_check(
         accounts_keys_map: &HashMap<nssa::Address, nssa::PrivateKey>,
     ) -> bool {
         let mut check_res = true;
@@ -32,32 +29,82 @@ impl NSSAUserData {
         check_res
     }
 
+    fn valid_private_key_transaction_pairing_check(
+        accounts_keys_map: &HashMap<nssa::Address, KeyChain>,
+    ) -> bool {
+        let mut check_res = true;
+        for (addr, key) in accounts_keys_map {
+            if nssa::Address::new(key.produce_user_address()) != *addr {
+                check_res = false;
+            }
+        }
+        check_res
+    }
+
     pub fn new_with_accounts(
         accounts_keys: HashMap<nssa::Address, nssa::PrivateKey>,
+        accounts_key_chains: HashMap<nssa::Address, KeyChain>,
     ) -> Result<Self> {
-        if !Self::valid_key_transaction_pairing_check(&accounts_keys) {
+        if !Self::valid_public_key_transaction_pairing_check(&accounts_keys) {
             anyhow::bail!(
                 "Key transaction pairing check not satisfied, there is addresses, which is not derived from keys"
             );
         }
 
-        let key_holder = KeyChain::new_os_random_with_accounts(accounts_keys);
+        if !Self::valid_private_key_transaction_pairing_check(&accounts_key_chains) {
+            anyhow::bail!(
+                "Key transaction pairing check not satisfied, there is addresses, which is not derived from keys"
+            );
+        }
 
-        Ok(Self { key_holder })
+        Ok(Self {
+            pub_account_signing_keys: accounts_keys,
+            user_private_accounts: accounts_key_chains,
+        })
     }
 
-    pub fn generate_new_account(&mut self) -> nssa::Address {
-        self.key_holder.generate_new_private_key()
+    /// Generated new private key for public transaction signatures
+    ///
+    /// Returns the address of new account
+    pub fn generate_new_public_transaction_private_key(&mut self) -> nssa::Address {
+        let private_key = nssa::PrivateKey::new_os_random();
+        let address = nssa::Address::from(&nssa::PublicKey::new_from_private_key(&private_key));
+
+        self.pub_account_signing_keys.insert(address, private_key);
+
+        address
     }
 
-    pub fn get_account_signing_key(&self, address: &nssa::Address) -> Option<&nssa::PrivateKey> {
-        self.key_holder.get_pub_account_signing_key(address)
+    /// Returns the signing key for public transaction signatures
+    pub fn get_pub_account_signing_key(
+        &self,
+        address: &nssa::Address,
+    ) -> Option<&nssa::PrivateKey> {
+        self.pub_account_signing_keys.get(address)
+    }
+
+    /// Generated new private key for privacy preserving transactions
+    ///
+    /// Returns the address of new account
+    pub fn generate_new_privacy_preserving_transaction_key_chain(&mut self) -> nssa::Address {
+        let key_chain = KeyChain::new_os_random();
+        let address = nssa::Address::new(key_chain.produce_user_address());
+
+        self.user_private_accounts.insert(address, key_chain);
+
+        address
+    }
+
+    /// Returns the signing key for public transaction signatures
+    pub fn get_private_account_key_chain(&self, address: &nssa::Address) -> Option<&KeyChain> {
+        self.user_private_accounts.get(address)
     }
 }
 
 impl Default for NSSAUserData {
     fn default() -> Self {
-        Self::new()
+        //Safe unwrap as maps are empty
+        Self::new_with_accounts(HashMap::default(), HashMap::default()).unwrap()
     }
 }
 
@@ -67,8 +114,19 @@ mod tests {
 
     #[test]
     fn test_new_account() {
-        let mut user_data = NSSAUserData::new();
+        let mut user_data = NSSAUserData::default();
 
-        let _addr = user_data.generate_new_account();
+        let addr_pub = user_data.generate_new_public_transaction_private_key();
+        let addr_private = user_data.generate_new_privacy_preserving_transaction_key_chain();
+
+        let is_private_key_generated = user_data.get_pub_account_signing_key(&addr_pub).is_some();
+
+        assert!(is_private_key_generated);
+
+        let is_key_chain_generated = user_data
+            .get_private_account_key_chain(&addr_private)
+            .is_some();
+
+        assert!(is_key_chain_generated);
     }
 }
diff --git a/nssa/Cargo.toml b/nssa/Cargo.toml
index 3163902..68d26fc 100644
--- a/nssa/Cargo.toml
+++ b/nssa/Cargo.toml
@@ -14,7 +14,11 @@ secp256k1 = "0.31.1"
 rand = "0.8"
 borsh = "1.5.7"
 hex = "0.4.3"
+k256 = "0.13.3"
 
 [dev-dependencies]
 test-program-methods = { path = "test_program_methods" }
 hex-literal = "1.0.0"
+
+[features]
+default = []
diff --git a/nssa/core/src/account.rs b/nssa/core/src/account.rs
index 597f558..ddae797 100644
--- a/nssa/core/src/account.rs
+++ b/nssa/core/src/account.rs
@@ -78,6 +78,7 @@ mod tests {
         assert_eq!(new_acc.program_owner, DEFAULT_PROGRAM_ID);
     }
 
+    #[cfg(feature = "host")]
     #[test]
     fn test_account_with_metadata_constructor() {
         let account = Account {
diff --git a/nssa/core/src/encryption/mod.rs b/nssa/core/src/encryption/mod.rs
index b79e75c..7b8d51f 100644
--- a/nssa/core/src/encryption/mod.rs
+++ b/nssa/core/src/encryption/mod.rs
@@ -13,6 +13,8 @@ pub use shared_key_derivation::{EphemeralPublicKey, EphemeralSecretKey, Incoming
 
 use crate::{Commitment, account::Account};
 
+pub type Scalar = [u8; 32];
+
 #[derive(Serialize, Deserialize, Clone)]
 pub struct SharedSecretKey([u8; 32]);
 
diff --git a/nssa/core/src/encryption/shared_key_derivation.rs b/nssa/core/src/encryption/shared_key_derivation.rs
index c735105..a889123 100644
--- a/nssa/core/src/encryption/shared_key_derivation.rs
+++ b/nssa/core/src/encryption/shared_key_derivation.rs
@@ -1,22 +1,22 @@
 use serde::{Deserialize, Serialize};
 
 use k256::{
-    AffinePoint, EncodedPoint, FieldBytes, ProjectivePoint, Scalar,
+    AffinePoint, EncodedPoint, FieldBytes, ProjectivePoint,
     elliptic_curve::{
         PrimeField,
         sec1::{FromEncodedPoint, ToEncodedPoint},
     },
 };
 
-use crate::SharedSecretKey;
+use crate::{SharedSecretKey, encryption::Scalar};
 
 #[derive(Debug, Serialize, Deserialize, Clone, PartialEq, Eq)]
 pub struct Secp256k1Point(pub(crate) Vec<u8>);
 
 impl Secp256k1Point {
-    pub fn from_scalar(value: [u8; 32]) -> Secp256k1Point {
+    pub fn from_scalar(value: Scalar) -> Secp256k1Point {
         let x_bytes: FieldBytes = value.into();
-        let x = Scalar::from_repr(x_bytes).unwrap();
+        let x = k256::Scalar::from_repr(x_bytes).unwrap();
 
         let p = ProjectivePoint::GENERATOR * x;
         let q = AffinePoint::from(p);
@@ -26,7 +26,7 @@ impl Secp256k1Point {
     }
 }
 
-pub type EphemeralSecretKey = [u8; 32];
+pub type EphemeralSecretKey = Scalar;
 pub type EphemeralPublicKey = Secp256k1Point;
 pub type IncomingViewingPublicKey = Secp256k1Point;
 impl From<&EphemeralSecretKey> for EphemeralPublicKey {
@@ -36,8 +36,8 @@ impl From<&EphemeralSecretKey> for EphemeralPublicKey {
 }
 
 impl SharedSecretKey {
-    pub fn new(scalar: &[u8; 32], point: &Secp256k1Point) -> Self {
-        let scalar = Scalar::from_repr((*scalar).into()).unwrap();
+    pub fn new(scalar: &Scalar, point: &Secp256k1Point) -> Self {
+        let scalar = k256::Scalar::from_repr((*scalar).into()).unwrap();
         let point: [u8; 33] = point.0.clone().try_into().unwrap();
 
         let encoded = EncodedPoint::from_bytes(point).unwrap();
diff --git a/nssa/core/src/nullifier.rs b/nssa/core/src/nullifier.rs
index c7ee26e..0c06830 100644
--- a/nssa/core/src/nullifier.rs
+++ b/nssa/core/src/nullifier.rs
@@ -9,7 +9,18 @@ pub struct NullifierPublicKey(pub(super) [u8; 32]);
 
 impl From<&NullifierPublicKey> for AccountId {
     fn from(value: &NullifierPublicKey) -> Self {
-        AccountId::new(value.0)
+        const PRIVATE_ACCOUNT_ID_PREFIX: &[u8; 32] = b"/NSSA/v0.1/AccountId/Private/\x00\x00\x00";
+
+        let mut bytes = [0; 64];
+        bytes[0..32].copy_from_slice(PRIVATE_ACCOUNT_ID_PREFIX);
+        bytes[32..].copy_from_slice(&value.0);
+        AccountId::new(Impl::hash_bytes(&bytes).as_bytes().try_into().unwrap())
+    }
+}
+
+impl AsRef<[u8]> for NullifierPublicKey {
+    fn as_ref(&self) -> &[u8] {
+        self.0.as_slice()
     }
 }
 
@@ -80,8 +91,8 @@ mod tests {
         ];
         let npk = NullifierPublicKey::from(&nsk);
         let expected_account_id = AccountId::new([
-            202, 120, 42, 189, 194, 218, 78, 244, 31, 6, 108, 169, 29, 61, 22, 221, 69, 138, 197,
-            161, 241, 39, 142, 242, 242, 50, 188, 201, 99, 28, 176, 238,
+            69, 160, 50, 67, 12, 56, 150, 116, 62, 145, 17, 161, 17, 45, 24, 53, 33, 167, 83, 178,
+            47, 114, 111, 233, 251, 30, 54, 244, 184, 22, 100, 236,
         ]);
 
         let account_id = AccountId::from(&npk);
diff --git a/nssa/program_methods/guest/src/bin/authenticated_transfer.rs b/nssa/program_methods/guest/src/bin/authenticated_transfer.rs
index 928b695..210e3f0 100644
--- a/nssa/program_methods/guest/src/bin/authenticated_transfer.rs
+++ b/nssa/program_methods/guest/src/bin/authenticated_transfer.rs
@@ -34,3 +34,4 @@ fn main() {
 
     write_nssa_outputs(vec![sender, receiver], vec![sender_post, receiver_post]);
 }
+
diff --git a/nssa/program_methods/guest/src/bin/pinata.rs b/nssa/program_methods/guest/src/bin/pinata.rs
new file mode 100644
index 0000000..fbea167
--- /dev/null
+++ b/nssa/program_methods/guest/src/bin/pinata.rs
@@ -0,0 +1,70 @@
+use nssa_core::program::{ProgramInput, read_nssa_inputs, write_nssa_outputs};
+use risc0_zkvm::sha::{Impl, Sha256};
+
+const PRIZE: u128 = 150;
+
+type Instruction = u128;
+
+struct Challenge {
+    difficulty: u8,
+    seed: [u8; 32],
+}
+
+impl Challenge {
+    fn new(bytes: &[u8]) -> Self {
+        assert_eq!(bytes.len(), 33);
+        let difficulty = bytes[0];
+        assert!(difficulty <= 32);
+
+        let mut seed = [0; 32];
+        seed.copy_from_slice(&bytes[1..]);
+        Self { difficulty, seed }
+    }
+
+    // Checks if the leftmost `self.difficulty` number of bytes of SHA256(self.data || solution) are
+    // zero.
+    fn validate_solution(&self, solution: Instruction) -> bool {
+        let mut bytes = [0; 32 + 16];
+        bytes[..32].copy_from_slice(&self.seed);
+        bytes[32..].copy_from_slice(&solution.to_le_bytes());
+        let digest: [u8; 32] = Impl::hash_bytes(&bytes).as_bytes().try_into().unwrap();
+        let difficulty = self.difficulty as usize;
+        digest[..difficulty].iter().all(|&b| b == 0)
+    }
+
+    fn next_data(self) -> [u8; 33] {
+        let mut result = [0; 33];
+        result[0] = self.difficulty;
+        result[1..].copy_from_slice(Impl::hash_bytes(&self.seed).as_bytes());
+        result
+    }
+}
+
+/// A pinata program
+fn main() {
+    // Read input accounts.
+    // It is expected to receive only two accounts: [pinata_account, winner_account]
+    let ProgramInput {
+        pre_states,
+        instruction: solution,
+    } = read_nssa_inputs::<Instruction>();
+
+    let [pinata, winner] = match pre_states.try_into() {
+        Ok(array) => array,
+        Err(_) => return,
+    };
+
+    let data = Challenge::new(&pinata.account.data);
+
+    if !data.validate_solution(solution) {
+        return;
+    }
+
+    let mut pinata_post = pinata.account.clone();
+    let mut winner_post = winner.account.clone();
+    pinata_post.balance -= PRIZE;
+    pinata_post.data = data.next_data().to_vec();
+    winner_post.balance += PRIZE;
+
+    write_nssa_outputs(vec![pinata, winner], vec![pinata_post, winner_post]);
+}
diff --git a/nssa/program_methods/guest/src/bin/privacy_preserving_circuit.rs b/nssa/program_methods/guest/src/bin/privacy_preserving_circuit.rs
index 24ef38e..235b5c8 100644
--- a/nssa/program_methods/guest/src/bin/privacy_preserving_circuit.rs
+++ b/nssa/program_methods/guest/src/bin/privacy_preserving_circuit.rs
@@ -32,11 +32,13 @@ fn main() {
 
     // Check that the program is well behaved.
     // See the # Programs section for the definition of the `validate_execution` method.
-    validate_execution(&pre_states, &post_states, program_id);
+    if !validate_execution(&pre_states, &post_states, program_id) {
+        panic!("Bad behaved program");
+    }
 
     let n_accounts = pre_states.len();
     if visibility_mask.len() != n_accounts {
-        panic!();
+        panic!("Invalid visibility mask length");
     }
 
     // These lists will be the public outputs of this circuit
@@ -59,7 +61,9 @@ fn main() {
                 public_pre_states.push(pre_states[i].clone());
 
                 let mut post = post_states[i].clone();
-                post.nonce += 1;
+                if pre_states[i].is_authorized {
+                    post.nonce += 1;
+                }
                 if post.program_owner == DEFAULT_PROGRAM_ID {
                     // Claim account
                     post.program_owner = program_id;
@@ -140,7 +144,7 @@ fn main() {
     }
 
     if private_keys_iter.next().is_some() {
-        panic!("Too many private accounts keys.");
+        panic!("Too many private account keys.");
     }
 
     if private_auth_iter.next().is_some() {
diff --git a/nssa/src/address.rs b/nssa/src/address.rs
index 5837e20..72144b2 100644
--- a/nssa/src/address.rs
+++ b/nssa/src/address.rs
@@ -2,6 +2,7 @@ use std::{fmt::Display, str::FromStr};
 
 use nssa_core::account::AccountId;
 use serde::{Deserialize, Serialize};
+use sha2::{Digest, Sha256};
 
 use crate::signature::PublicKey;
 
@@ -84,7 +85,12 @@ impl<'de> Deserialize<'de> for Address {
 
 impl From<&Address> for AccountId {
     fn from(address: &Address) -> Self {
-        AccountId::new(address.value)
+        const PUBLIC_ACCOUNT_ID_PREFIX: &[u8; 32] = b"/NSSA/v0.1/AccountId/Public/\x00\x00\x00\x00";
+
+        let mut hasher = Sha256::new();
+        hasher.update(PUBLIC_ACCOUNT_ID_PREFIX);
+        hasher.update(address.value);
+        AccountId::new(hasher.finalize().into())
     }
 }
 
@@ -125,7 +131,10 @@ mod tests {
     #[test]
     fn test_account_id_from_address() {
         let address: Address = "37".repeat(32).parse().unwrap();
-        let expected_account_id = AccountId::new([55; 32]);
+        let expected_account_id = AccountId::new([
+            93, 223, 66, 245, 78, 230, 157, 188, 110, 161, 134, 255, 137, 177, 220, 88, 37, 44,
+            243, 91, 236, 4, 36, 147, 185, 112, 21, 49, 234, 4, 107, 185,
+        ]);
 
         let account_id = AccountId::from(&address);
 
diff --git a/nssa/src/encoding/mod.rs b/nssa/src/encoding/mod.rs
new file mode 100644
index 0000000..5ff45e2
--- /dev/null
+++ b/nssa/src/encoding/mod.rs
@@ -0,0 +1,2 @@
+pub mod privacy_preserving_transaction;
+pub mod public_transaction;
diff --git a/nssa/src/privacy_preserving_transaction/encoding.rs b/nssa/src/encoding/privacy_preserving_transaction.rs
similarity index 67%
rename from nssa/src/privacy_preserving_transaction/encoding.rs
rename to nssa/src/encoding/privacy_preserving_transaction.rs
index b5d4950..2e5ea14 100644
--- a/nssa/src/privacy_preserving_transaction/encoding.rs
+++ b/nssa/src/encoding/privacy_preserving_transaction.rs
@@ -7,16 +7,20 @@ use nssa_core::{
 };
 
 use crate::{
-    Address, error::NssaError, privacy_preserving_transaction::message::EncryptedAccountData,
+    Address, PrivacyPreservingTransaction, PublicKey, Signature,
+    error::NssaError,
+    privacy_preserving_transaction::{
+        circuit::Proof,
+        message::{EncryptedAccountData, Message},
+        witness_set::WitnessSet,
+    },
 };
 
-use super::message::Message;
-
 const MESSAGE_ENCODING_PREFIX_LEN: usize = 22;
 const MESSAGE_ENCODING_PREFIX: &[u8; MESSAGE_ENCODING_PREFIX_LEN] = b"\x01/NSSA/v0.1/TxMessage/";
 
 impl EncryptedAccountData {
-    pub(crate) fn to_bytes(&self) -> Vec<u8> {
+    pub fn to_bytes(&self) -> Vec<u8> {
         let mut bytes = self.ciphertext.to_bytes();
         bytes.extend_from_slice(&self.epk.to_bytes());
         bytes.push(self.view_tag);
@@ -168,3 +172,86 @@ impl Message {
         })
     }
 }
+
+impl WitnessSet {
+    pub(crate) fn to_bytes(&self) -> Vec<u8> {
+        let mut bytes = Vec::new();
+        let size = self.signatures_and_public_keys().len() as u32;
+        bytes.extend_from_slice(&size.to_le_bytes());
+        for (signature, public_key) in self.signatures_and_public_keys() {
+            bytes.extend_from_slice(signature.to_bytes());
+            bytes.extend_from_slice(public_key.to_bytes());
+        }
+        bytes.extend_from_slice(&self.proof.to_bytes());
+        bytes
+    }
+
+    pub(crate) fn from_cursor(cursor: &mut Cursor<&[u8]>) -> Result<Self, NssaError> {
+        let num_signatures: u32 = {
+            let mut buf = [0u8; 4];
+            cursor.read_exact(&mut buf)?;
+            u32::from_le_bytes(buf)
+        };
+        let mut signatures_and_public_keys = Vec::with_capacity(num_signatures as usize);
+        for _i in 0..num_signatures {
+            let signature = Signature::from_cursor(cursor)?;
+            let public_key = PublicKey::from_cursor(cursor)?;
+            signatures_and_public_keys.push((signature, public_key))
+        }
+        let proof = Proof::from_cursor(cursor)?;
+        Ok(Self {
+            signatures_and_public_keys,
+            proof,
+        })
+    }
+}
+
+impl PrivacyPreservingTransaction {
+    pub fn to_bytes(&self) -> Vec<u8> {
+        let mut bytes = self.message().to_bytes();
+        bytes.extend_from_slice(&self.witness_set().to_bytes());
+        bytes
+    }
+
+    pub fn from_bytes(bytes: &[u8]) -> Result<Self, NssaError> {
+        let mut cursor = Cursor::new(bytes);
+        Self::from_cursor(&mut cursor)
+    }
+
+    pub fn from_cursor(cursor: &mut Cursor<&[u8]>) -> Result<Self, NssaError> {
+        let message = Message::from_cursor(cursor)?;
+        let witness_set = WitnessSet::from_cursor(cursor)?;
+        Ok(PrivacyPreservingTransaction::new(message, witness_set))
+    }
+}
+
+impl Proof {
+    pub fn to_bytes(&self) -> Vec<u8> {
+        let mut bytes = Vec::new();
+        let proof_len = self.0.len() as u32;
+        bytes.extend_from_slice(&proof_len.to_le_bytes());
+        bytes.extend_from_slice(&self.0);
+        bytes
+    }
+
+    pub fn from_cursor(cursor: &mut Cursor<&[u8]>) -> Result<Self, NssaError> {
+        let proof_len = u32_from_cursor(cursor) as usize;
+        let mut proof = Vec::with_capacity(proof_len);
+
+        for _ in 0..proof_len {
+            let mut one_byte_buf = [0u8];
+
+            cursor.read_exact(&mut one_byte_buf)?;
+
+            proof.push(one_byte_buf[0]);
+        }
+        Ok(Self(proof))
+    }
+}
+
+// TODO: Improve error handling. Remove unwraps.
+pub fn u32_from_cursor(cursor: &mut Cursor<&[u8]>) -> u32 {
+    let mut word_buf = [0u8; 4];
+    cursor.read_exact(&mut word_buf).unwrap();
+    u32::from_le_bytes(word_buf)
+}
diff --git a/nssa/src/public_transaction/encoding.rs b/nssa/src/encoding/public_transaction.rs
similarity index 100%
rename from nssa/src/public_transaction/encoding.rs
rename to nssa/src/encoding/public_transaction.rs
diff --git a/nssa/src/error.rs b/nssa/src/error.rs
index 1d6d6ad..0e85789 100644
--- a/nssa/src/error.rs
+++ b/nssa/src/error.rs
@@ -45,4 +45,7 @@ pub enum NssaError {
 
     #[error("Invalid privacy preserving execution circuit proof")]
     InvalidPrivacyPreservingProof,
+
+    #[error("Circuit proving error")]
+    CircuitProvingError(String),
 }
diff --git a/nssa/src/lib.rs b/nssa/src/lib.rs
index 2a5682c..0e33f50 100644
--- a/nssa/src/lib.rs
+++ b/nssa/src/lib.rs
@@ -1,4 +1,5 @@
 pub mod address;
+pub mod encoding;
 pub mod error;
 mod merkle_tree;
 mod privacy_preserving_transaction;
diff --git a/nssa/src/privacy_preserving_transaction/circuit.rs b/nssa/src/privacy_preserving_transaction/circuit.rs
index d8e5701..8575bfe 100644
--- a/nssa/src/privacy_preserving_transaction/circuit.rs
+++ b/nssa/src/privacy_preserving_transaction/circuit.rs
@@ -12,15 +12,7 @@ use program_methods::{PRIVACY_PRESERVING_CIRCUIT_ELF, PRIVACY_PRESERVING_CIRCUIT
 
 /// Proof of the privacy preserving execution circuit
 #[derive(Debug, Clone, PartialEq, Eq)]
-pub struct Proof(Vec<u8>);
-
-impl Proof {
-    pub(crate) fn is_valid_for(&self, circuit_output: &PrivacyPreservingCircuitOutput) -> bool {
-        let inner: InnerReceipt = borsh::from_slice(&self.0).unwrap();
-        let receipt = Receipt::new(inner, circuit_output.to_bytes());
-        receipt.verify(PRIVACY_PRESERVING_CIRCUIT_ID).is_ok()
-    }
-}
+pub struct Proof(pub(crate) Vec<u8>);
 
 /// Generates a proof of the execution of a NSSA program inside the privacy preserving execution
 /// circuit
@@ -55,7 +47,9 @@ pub fn execute_and_prove(
     env_builder.write(&circuit_input).unwrap();
     let env = env_builder.build().unwrap();
     let prover = default_prover();
-    let prove_info = prover.prove(env, PRIVACY_PRESERVING_CIRCUIT_ELF).unwrap();
+    let prove_info = prover
+        .prove(env, PRIVACY_PRESERVING_CIRCUIT_ELF)
+        .map_err(|e| NssaError::CircuitProvingError(e.to_string()))?;
 
     let proof = Proof(borsh::to_vec(&prove_info.receipt.inner)?);
 
@@ -86,6 +80,14 @@ fn execute_and_prove_program(
         .receipt)
 }
 
+impl Proof {
+    pub(crate) fn is_valid_for(&self, circuit_output: &PrivacyPreservingCircuitOutput) -> bool {
+        let inner: InnerReceipt = borsh::from_slice(&self.0).unwrap();
+        let receipt = Receipt::new(inner, circuit_output.to_bytes());
+        receipt.verify(PRIVACY_PRESERVING_CIRCUIT_ID).is_ok()
+    }
+}
+
 #[cfg(test)]
 mod tests {
     use nssa_core::{
@@ -110,6 +112,7 @@ mod tests {
         let program = Program::authenticated_transfer_program();
         let sender = AccountWithMetadata::new(
             Account {
+                program_owner: program.id(),
                 balance: 100,
                 ..Account::default()
             },
@@ -177,6 +180,7 @@ mod tests {
 
     #[test]
     fn prove_privacy_preserving_execution_circuit_fully_private() {
+        let program = Program::authenticated_transfer_program();
         let sender_keys = test_private_account_keys_1();
         let recipient_keys = test_private_account_keys_2();
 
@@ -184,7 +188,8 @@ mod tests {
             Account {
                 balance: 100,
                 nonce: 0xdeadbeef,
-                ..Account::default()
+                program_owner: program.id(),
+                data: vec![],
             },
             true,
             AccountId::from(&sender_keys.npk()),
diff --git a/nssa/src/privacy_preserving_transaction/message.rs b/nssa/src/privacy_preserving_transaction/message.rs
index 244a81f..a769c72 100644
--- a/nssa/src/privacy_preserving_transaction/message.rs
+++ b/nssa/src/privacy_preserving_transaction/message.rs
@@ -151,7 +151,7 @@ pub mod tests {
     #[test]
     fn test_encrypted_account_data_constructor() {
         let npk = NullifierPublicKey::from(&[1; 32]);
-        let ivk = IncomingViewingPublicKey::from(&[2; 32]);
+        let ivk = IncomingViewingPublicKey::from_scalar([2; 32]);
         let account = Account::default();
         let commitment = Commitment::new(&npk, &account);
         let esk = [3; 32];
diff --git a/nssa/src/privacy_preserving_transaction/mod.rs b/nssa/src/privacy_preserving_transaction/mod.rs
index 54fc94b..c74c077 100644
--- a/nssa/src/privacy_preserving_transaction/mod.rs
+++ b/nssa/src/privacy_preserving_transaction/mod.rs
@@ -1,4 +1,3 @@
-mod encoding;
 pub mod message;
 pub mod transaction;
 pub mod witness_set;
diff --git a/nssa/src/privacy_preserving_transaction/transaction.rs b/nssa/src/privacy_preserving_transaction/transaction.rs
index 6992b2f..0a8e124 100644
--- a/nssa/src/privacy_preserving_transaction/transaction.rs
+++ b/nssa/src/privacy_preserving_transaction/transaction.rs
@@ -170,3 +170,42 @@ fn n_unique<T: Eq + Hash>(data: &[T]) -> usize {
     let set: HashSet<&T> = data.iter().collect();
     set.len()
 }
+
+#[cfg(test)]
+mod tests {
+    use crate::{
+        Address, PrivacyPreservingTransaction, PrivateKey, PublicKey,
+        privacy_preserving_transaction::{
+            circuit::Proof, message::tests::message_for_tests, witness_set::WitnessSet,
+        },
+    };
+
+    fn keys_for_tests() -> (PrivateKey, PrivateKey, Address, Address) {
+        let key1 = PrivateKey::try_new([1; 32]).unwrap();
+        let key2 = PrivateKey::try_new([2; 32]).unwrap();
+        let addr1 = Address::from(&PublicKey::new_from_private_key(&key1));
+        let addr2 = Address::from(&PublicKey::new_from_private_key(&key2));
+        (key1, key2, addr1, addr2)
+    }
+
+    fn proof_for_tests() -> Proof {
+        Proof(vec![1, 2, 3, 4, 5])
+    }
+
+    fn transaction_for_tests() -> PrivacyPreservingTransaction {
+        let (key1, key2, _, _) = keys_for_tests();
+
+        let message = message_for_tests();
+
+        let witness_set = WitnessSet::for_message(&message, proof_for_tests(), &[&key1, &key2]);
+        PrivacyPreservingTransaction::new(message, witness_set)
+    }
+
+    #[test]
+    fn test_privacy_preserving_transaction_encoding_bytes_roundtrip() {
+        let tx = transaction_for_tests();
+        let bytes = tx.to_bytes();
+        let tx_from_bytes = PrivacyPreservingTransaction::from_bytes(&bytes).unwrap();
+        assert_eq!(tx, tx_from_bytes);
+    }
+}
diff --git a/nssa/src/privacy_preserving_transaction/witness_set.rs b/nssa/src/privacy_preserving_transaction/witness_set.rs
index fe897ce..9fc587e 100644
--- a/nssa/src/privacy_preserving_transaction/witness_set.rs
+++ b/nssa/src/privacy_preserving_transaction/witness_set.rs
@@ -5,8 +5,8 @@ use crate::{
 
 #[derive(Debug, Clone, PartialEq, Eq)]
 pub struct WitnessSet {
-    pub(super) signatures_and_public_keys: Vec<(Signature, PublicKey)>,
-    pub(super) proof: Proof,
+    pub(crate) signatures_and_public_keys: Vec<(Signature, PublicKey)>,
+    pub(crate) proof: Proof,
 }
 
 impl WitnessSet {
diff --git a/nssa/src/program.rs b/nssa/src/program.rs
index 9c34e1d..5abc153 100644
--- a/nssa/src/program.rs
+++ b/nssa/src/program.rs
@@ -2,7 +2,10 @@ use nssa_core::{
     account::{Account, AccountWithMetadata},
     program::{InstructionData, ProgramId, ProgramOutput},
 };
-use program_methods::{AUTHENTICATED_TRANSFER_ELF, AUTHENTICATED_TRANSFER_ID, TOKEN_ELF, TOKEN_ID};
+use program_methods::{
+    AUTHENTICATED_TRANSFER_ELF, AUTHENTICATED_TRANSFER_ID, PINATA_ELF, PINATA_ID, TOKEN_ELF,
+    TOKEN_ID,
+};
 use risc0_zkvm::{ExecutorEnv, ExecutorEnvBuilder, default_executor, serde::to_vec};
 use serde::Serialize;
 
@@ -82,6 +85,16 @@ impl Program {
     }
 }
 
+// TODO: Testnet only. Refactor to prevent compilation on mainnet.
+impl Program {
+    pub fn pinata() -> Self {
+        Self {
+            id: PINATA_ID,
+            elf: PINATA_ELF,
+        }
+    }
+}
+
 #[cfg(test)]
 mod tests {
     use nssa_core::account::{Account, AccountId, AccountWithMetadata};
diff --git a/nssa/src/public_transaction/mod.rs b/nssa/src/public_transaction/mod.rs
index 9ae24cf..278e9df 100644
--- a/nssa/src/public_transaction/mod.rs
+++ b/nssa/src/public_transaction/mod.rs
@@ -1,4 +1,3 @@
-mod encoding;
 mod message;
 mod transaction;
 mod witness_set;
diff --git a/nssa/src/public_transaction/witness_set.rs b/nssa/src/public_transaction/witness_set.rs
index f0e5c6b..e5095ba 100644
--- a/nssa/src/public_transaction/witness_set.rs
+++ b/nssa/src/public_transaction/witness_set.rs
@@ -2,7 +2,7 @@ use crate::{PrivateKey, PublicKey, Signature, public_transaction::Message};
 
 #[derive(Debug, Clone, PartialEq, Eq)]
 pub struct WitnessSet {
-    pub(super) signatures_and_public_keys: Vec<(Signature, PublicKey)>,
+    pub(crate) signatures_and_public_keys: Vec<(Signature, PublicKey)>,
 }
 
 impl WitnessSet {
diff --git a/nssa/src/state.rs b/nssa/src/state.rs
index 42f9196..d978c8e 100644
--- a/nssa/src/state.rs
+++ b/nssa/src/state.rs
@@ -146,12 +146,6 @@ impl V01State {
             *current_account = post;
         }
 
-        // // 5. Increment nonces
-        for address in tx.signer_addresses() {
-            let current_account = self.get_account_by_address_mut(address);
-            current_account.nonce += 1;
-        }
-
         Ok(())
     }
 
@@ -212,6 +206,24 @@ impl V01State {
     }
 }
 
+// TODO: Testnet only. Refactor to prevent compilation on mainnet.
+impl V01State {
+    pub fn add_pinata_program(&mut self, address: Address) {
+        self.insert_program(Program::pinata());
+
+        self.public_state.insert(
+            address,
+            Account {
+                program_owner: Program::pinata().id(),
+                balance: 1500,
+                // Difficulty: 3
+                data: vec![3; 33],
+                nonce: 0,
+            },
+        );
+    }
+}
+
 #[cfg(test)]
 pub mod tests {
 
@@ -220,6 +232,7 @@ pub mod tests {
     use crate::{
         Address, PublicKey, PublicTransaction, V01State,
         error::NssaError,
+        execute_and_prove,
         privacy_preserving_transaction::{
             PrivacyPreservingTransaction, circuit, message::Message, witness_set::WitnessSet,
         },
@@ -230,8 +243,8 @@ pub mod tests {
 
     use nssa_core::{
         Commitment, Nullifier, NullifierPublicKey, NullifierSecretKey, SharedSecretKey,
-        account::{Account, AccountWithMetadata, Nonce},
-        encryption::{EphemeralPublicKey, IncomingViewingPublicKey},
+        account::{Account, AccountId, AccountWithMetadata, Nonce},
+        encryption::{EphemeralPublicKey, IncomingViewingPublicKey, Scalar},
     };
 
     fn transfer_transaction(
@@ -749,7 +762,7 @@ pub mod tests {
 
     pub struct TestPrivateKeys {
         pub nsk: NullifierSecretKey,
-        pub isk: [u8; 32],
+        pub isk: Scalar,
     }
 
     impl TestPrivateKeys {
@@ -940,6 +953,13 @@ pub mod tests {
             &state,
         );
 
+        let expected_sender_post = {
+            let mut this = state.get_account_by_address(&sender_keys.address());
+            this.balance -= balance_to_move;
+            this.nonce += 1;
+            this
+        };
+
         let [expected_new_commitment] = tx.message().new_commitments.clone().try_into().unwrap();
         assert!(!state.private_state.0.contains(&expected_new_commitment));
 
@@ -947,6 +967,8 @@ pub mod tests {
             .transition_from_privacy_preserving_transaction(&tx)
             .unwrap();
 
+        let sender_post = state.get_account_by_address(&sender_keys.address());
+        assert_eq!(sender_post, expected_sender_post);
         assert!(state.private_state.0.contains(&expected_new_commitment));
 
         assert_eq!(
@@ -1039,6 +1061,12 @@ pub mod tests {
 
         let balance_to_move = 37;
 
+        let expected_recipient_post = {
+            let mut this = state.get_account_by_address(&recipient_keys.address());
+            this.balance += balance_to_move;
+            this
+        };
+
         let tx = deshielded_balance_transfer_for_tests(
             &sender_keys,
             &sender_private_account,
@@ -1069,6 +1097,8 @@ pub mod tests {
             .transition_from_privacy_preserving_transaction(&tx)
             .unwrap();
 
+        let recipient_post = state.get_account_by_address(&recipient_keys.address());
+        assert_eq!(recipient_post, expected_recipient_post);
         assert!(state.private_state.0.contains(&sender_pre_commitment));
         assert!(state.private_state.0.contains(&expected_new_commitment));
         assert!(state.private_state.1.contains(&expected_new_nullifier));
@@ -1079,4 +1109,823 @@ pub mod tests {
             recipient_initial_balance + balance_to_move
         );
     }
+
+    #[test]
+    fn test_burner_program_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::burner();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_minter_program_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::minter();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_nonce_changer_program_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::nonce_changer_program();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(()).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_data_changer_program_should_fail_for_non_owned_account_in_privacy_preserving_circuit() {
+        let program = Program::data_changer();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: [0, 1, 2, 3, 4, 5, 6, 7],
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(()).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_extra_output_program_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::extra_output_program();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(()).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_missing_output_program_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::missing_output_program();
+        let public_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let public_account_2 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account_1, public_account_2],
+            &Program::serialize_instruction(()).unwrap(),
+            &[0, 0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_program_owner_changer_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::program_owner_changer();
+        let public_account = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account],
+            &Program::serialize_instruction(()).unwrap(),
+            &[0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_transfer_from_non_owned_account_should_fail_in_privacy_preserving_circuit() {
+        let program = Program::simple_balance_transfer();
+        let public_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: [0, 1, 2, 3, 4, 5, 6, 7],
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let public_account_2 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[public_account_1, public_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[0, 0],
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_fails_if_visibility_masks_have_incorrect_lenght() {
+        let program = Program::simple_balance_transfer();
+        let public_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let public_account_2 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 0,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([1; 32]),
+        );
+
+        // Setting only one visibility mask for a circuit execution with two pre_state accounts.
+        let visibility_mask = [0];
+        let result = execute_and_prove(
+            &[public_account_1, public_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &visibility_mask,
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_fails_if_insufficient_nonces_are_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting only one nonce for an execution with two private accounts.
+        let private_account_nonces = [0xdeadbeef1];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &private_account_nonces,
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_fails_if_insufficient_keys_are_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting only one key for an execution with two private accounts.
+        let private_account_keys = [(
+            sender_keys.npk(),
+            SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+        )];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &private_account_keys,
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_fails_if_insufficient_auth_keys_are_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting no auth key for an execution with one non default private accounts.
+        let private_account_auth = [];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &private_account_auth,
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_fails_if_invalid_auth_keys_are_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        let private_account_keys = [
+            // First private account is the sender
+            (
+                sender_keys.npk(),
+                SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+            ),
+            // Second private account is the recipient
+            (
+                recipient_keys.npk(),
+                SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+            ),
+        ];
+        let private_account_auth = [
+            // Setting the recipient key to authorize the sender.
+            // This should be set to the sender private account in
+            // a normal circumstance. The recipient can't authorize this.
+            (recipient_keys.nsk, (0, vec![])),
+        ];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &private_account_keys,
+            &private_account_auth,
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_if_new_private_account_with_non_default_balance_is_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 = AccountWithMetadata::new(
+            Account {
+                // Non default balance
+                balance: 1,
+                ..Account::default()
+            },
+            false,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_if_new_private_account_with_non_default_program_owner_is_provided()
+    {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 = AccountWithMetadata::new(
+            Account {
+                // Non default program_owner
+                program_owner: [0, 1, 2, 3, 4, 5, 6, 7],
+                ..Account::default()
+            },
+            false,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_if_new_private_account_with_non_default_data_is_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 = AccountWithMetadata::new(
+            Account {
+                // Non default data
+                data: b"hola mundo".to_vec(),
+                ..Account::default()
+            },
+            false,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 = AccountWithMetadata::new(
+            Account {
+                // Non default nonce
+                nonce: 0xdeadbeef,
+                ..Account::default()
+            },
+            false,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_if_new_private_account_is_provided_with_default_values_but_marked_as_authorized()
+     {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 = AccountWithMetadata::new(
+            Account::default(),
+            // This should be set to false in normal circumstances
+            true,
+            AccountId::new([1; 32]),
+        );
+
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_with_invalid_visibility_mask_value() {
+        let program = Program::simple_balance_transfer();
+        let public_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let public_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        let visibility_mask = [0, 3];
+        let result = execute_and_prove(
+            &[public_account_1, public_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &visibility_mask,
+            &[],
+            &[],
+            &[],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_with_too_many_nonces() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting three new private account nonces for a circuit execution with only two private
+        // accounts.
+        let private_account_nonces = [0xdeadbeef1, 0xdeadbeef2, 0xdeadbeef3];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &private_account_nonces,
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_with_too_many_private_account_keys() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting three private account keys for a circuit execution with only two private
+        // accounts.
+        let private_account_keys = [
+            (
+                sender_keys.npk(),
+                SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+            ),
+            (
+                recipient_keys.npk(),
+                SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+            ),
+            (
+                sender_keys.npk(),
+                SharedSecretKey::new(&[57; 32], &sender_keys.ivk()),
+            ),
+        ];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &[1, 2],
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &private_account_keys,
+            &[(sender_keys.nsk, (0, vec![]))],
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
+
+    #[test]
+    fn test_circuit_should_fail_with_too_many_private_account_auth_keys() {
+        let program = Program::simple_balance_transfer();
+        let sender_keys = test_private_account_keys_1();
+        let recipient_keys = test_private_account_keys_2();
+        let private_account_1 = AccountWithMetadata::new(
+            Account {
+                program_owner: program.id(),
+                balance: 100,
+                ..Account::default()
+            },
+            true,
+            AccountId::new([0; 32]),
+        );
+        let private_account_2 =
+            AccountWithMetadata::new(Account::default(), false, AccountId::new([1; 32]));
+
+        // Setting two private account keys for a circuit execution with only one non default
+        // private account (visibility mask equal to 1 means that auth keys are expected).
+        let visibility_mask = [1, 2];
+        let private_account_auth = [
+            (sender_keys.nsk, (0, vec![])),
+            (recipient_keys.nsk, (1, vec![])),
+        ];
+        let result = execute_and_prove(
+            &[private_account_1, private_account_2],
+            &Program::serialize_instruction(10u128).unwrap(),
+            &visibility_mask,
+            &[0xdeadbeef1, 0xdeadbeef2],
+            &[
+                (
+                    sender_keys.npk(),
+                    SharedSecretKey::new(&[55; 32], &sender_keys.ivk()),
+                ),
+                (
+                    recipient_keys.npk(),
+                    SharedSecretKey::new(&[56; 32], &recipient_keys.ivk()),
+                ),
+            ],
+            &private_account_auth,
+            &program,
+        );
+
+        assert!(matches!(result, Err(NssaError::CircuitProvingError(_))));
+    }
 }
diff --git a/nssa/test_program_methods/guest/src/bin/missing_output.rs b/nssa/test_program_methods/guest/src/bin/missing_output.rs
index 2174266..7b6016c 100644
--- a/nssa/test_program_methods/guest/src/bin/missing_output.rs
+++ b/nssa/test_program_methods/guest/src/bin/missing_output.rs
@@ -5,12 +5,12 @@ type Instruction = ();
 fn main() {
     let ProgramInput { pre_states, .. } = read_nssa_inputs::<Instruction>();
 
-    let [pre1, _] = match pre_states.try_into() {
+    let [pre1, pre2] = match pre_states.try_into() {
         Ok(array) => array,
         Err(_) => return,
     };
 
     let account_pre1 = pre1.account.clone();
 
-    write_nssa_outputs(vec![pre1], vec![account_pre1]);
+    write_nssa_outputs(vec![pre1, pre2], vec![account_pre1]);
 }
diff --git a/sequencer_core/Cargo.toml b/sequencer_core/Cargo.toml
index 1c56f11..bfed0cb 100644
--- a/sequencer_core/Cargo.toml
+++ b/sequencer_core/Cargo.toml
@@ -9,6 +9,7 @@ anyhow.workspace = true
 serde.workspace = true
 rand.workspace = true
 tempfile.workspace = true
+chrono.workspace = true
 log.workspace = true
 
 [dependencies.storage]
@@ -22,3 +23,7 @@ path = "../common"
 
 [dependencies.nssa]
 path = "../nssa"
+
+[features]
+default = []
+testnet = []
diff --git a/sequencer_core/src/config.rs b/sequencer_core/src/config.rs
index 4a99f0b..cdf79a3 100644
--- a/sequencer_core/src/config.rs
+++ b/sequencer_core/src/config.rs
@@ -27,4 +27,6 @@ pub struct SequencerConfig {
     pub port: u16,
     ///List of initial accounts data
     pub initial_accounts: Vec<AccountInitialData>,
+    ///Sequencer own signing key
+    pub signing_key: [u8; 32],
 }
diff --git a/sequencer_core/src/lib.rs b/sequencer_core/src/lib.rs
index 2137c8b..59b787e 100644
--- a/sequencer_core/src/lib.rs
+++ b/sequencer_core/src/lib.rs
@@ -1,7 +1,11 @@
 use std::fmt::Display;
 
 use anyhow::Result;
-use common::{block::HashableBlockData, merkle_tree_public::TreeHashType};
+use common::{
+    TreeHashType,
+    block::HashableBlockData,
+    transaction::{EncodedTransaction, NSSATransaction},
+};
 use config::SequencerConfig;
 use log::warn;
 use mempool::MemPool;
@@ -13,7 +17,7 @@ pub mod sequencer_store;
 
 pub struct SequencerCore {
     pub store: SequecerChainStore,
-    pub mempool: MemPool<nssa::PublicTransaction>,
+    pub mempool: MemPool<EncodedTransaction>,
     pub sequencer_config: SequencerConfig,
     pub chain_height: u64,
 }
@@ -51,6 +55,7 @@ impl SequencerCore {
                 config.genesis_id,
                 config.is_genesis_random,
                 &config.initial_accounts,
+                nssa::PrivateKey::try_new(config.signing_key).unwrap(),
             ),
             mempool: MemPool::default(),
             chain_height: config.genesis_id,
@@ -60,20 +65,37 @@ impl SequencerCore {
 
     pub fn transaction_pre_check(
         &mut self,
-        tx: nssa::PublicTransaction,
-    ) -> Result<nssa::PublicTransaction, TransactionMalformationErrorKind> {
+        tx: NSSATransaction,
+    ) -> Result<NSSATransaction, TransactionMalformationErrorKind> {
         // Stateless checks here
-        if tx.witness_set().is_valid_for(tx.message()) {
-            Ok(tx)
-        } else {
-            Err(TransactionMalformationErrorKind::InvalidSignature)
+        match tx {
+            NSSATransaction::Public(tx) => {
+                if tx.witness_set().is_valid_for(tx.message()) {
+                    Ok(NSSATransaction::Public(tx))
+                } else {
+                    Err(TransactionMalformationErrorKind::InvalidSignature)
+                }
+            }
+            NSSATransaction::PrivacyPreserving(tx) => {
+                if tx.witness_set().signatures_are_valid_for(tx.message()) {
+                    Ok(NSSATransaction::PrivacyPreserving(tx))
+                } else {
+                    Err(TransactionMalformationErrorKind::InvalidSignature)
+                }
+            }
         }
     }
 
     pub fn push_tx_into_mempool_pre_check(
         &mut self,
-        transaction: nssa::PublicTransaction,
+        transaction: EncodedTransaction,
     ) -> Result<(), TransactionMalformationErrorKind> {
+        let transaction = NSSATransaction::try_from(&transaction).map_err(|_| {
+            TransactionMalformationErrorKind::FailedToDecode {
+                tx: transaction.hash(),
+            }
+        })?;
+
         let mempool_size = self.mempool.len();
         if mempool_size >= self.sequencer_config.max_num_tx_in_block {
             return Err(TransactionMalformationErrorKind::MempoolFullForRound);
@@ -83,19 +105,29 @@ impl SequencerCore {
             .transaction_pre_check(transaction)
             .inspect_err(|err| warn!("Error at pre_check {err:#?}"))?;
 
-        self.mempool.push_item(authenticated_tx);
+        self.mempool.push_item(authenticated_tx.into());
 
         Ok(())
     }
 
     fn execute_check_transaction_on_state(
         &mut self,
-        tx: nssa::PublicTransaction,
-    ) -> Result<nssa::PublicTransaction, nssa::error::NssaError> {
-        self.store
-            .state
-            .transition_from_public_transaction(&tx)
-            .inspect_err(|err| warn!("Error at transition {err:#?}"))?;
+        tx: NSSATransaction,
+    ) -> Result<NSSATransaction, nssa::error::NssaError> {
+        match &tx {
+            NSSATransaction::Public(tx) => {
+                self.store
+                    .state
+                    .transition_from_public_transaction(tx)
+                    .inspect_err(|err| warn!("Error at transition {err:#?}"))?;
+            }
+            NSSATransaction::PrivacyPreserving(tx) => {
+                self.store
+                    .state
+                    .transition_from_privacy_preserving_transaction(tx)
+                    .inspect_err(|err| warn!("Error at transition {err:#?}"))?;
+            }
+        }
 
         Ok(tx)
     }
@@ -104,29 +136,41 @@ impl SequencerCore {
     pub fn produce_new_block_with_mempool_transactions(&mut self) -> Result<u64> {
         let new_block_height = self.chain_height + 1;
 
-        let transactions = self
-            .mempool
-            .pop_size(self.sequencer_config.max_num_tx_in_block);
+        let mut num_valid_transactions_in_block = 0;
+        let mut valid_transactions = vec![];
 
-        let valid_transactions: Vec<_> = transactions
-            .into_iter()
-            .filter_map(|tx| self.execute_check_transaction_on_state(tx).ok())
-            .collect();
+        while let Some(tx) = self.mempool.pop_last() {
+            let nssa_transaction = NSSATransaction::try_from(&tx)
+                .map_err(|_| TransactionMalformationErrorKind::FailedToDecode { tx: tx.hash() })?;
+
+            if let Ok(valid_tx) = self.execute_check_transaction_on_state(nssa_transaction) {
+                valid_transactions.push(valid_tx.into());
+
+                num_valid_transactions_in_block += 1;
+
+                if num_valid_transactions_in_block >= self.sequencer_config.max_num_tx_in_block {
+                    break;
+                }
+            }
+        }
 
         let prev_block_hash = self
             .store
             .block_store
             .get_block_at_id(self.chain_height)?
+            .header
             .hash;
 
+        let curr_time = chrono::Utc::now().timestamp_millis() as u64;
+
         let hashable_data = HashableBlockData {
             block_id: new_block_height,
-            prev_block_id: self.chain_height,
             transactions: valid_transactions,
             prev_block_hash,
+            timestamp: curr_time,
         };
 
-        let block = hashable_data.into();
+        let block = hashable_data.into_block(&self.store.block_store.signing_key);
 
         self.store.block_store.put_block_at_id(block)?;
 
@@ -138,10 +182,18 @@ impl SequencerCore {
 
 #[cfg(test)]
 mod tests {
+    use common::test_utils::sequencer_sign_key_for_testing;
+
     use crate::config::AccountInitialData;
 
     use super::*;
 
+    fn parse_unwrap_tx_body_into_nssa_tx(tx_body: EncodedTransaction) -> NSSATransaction {
+        NSSATransaction::try_from(&tx_body)
+            .map_err(|_| TransactionMalformationErrorKind::FailedToDecode { tx: tx_body.hash() })
+            .unwrap()
+    }
+
     fn setup_sequencer_config_variable_initial_accounts(
         initial_accounts: Vec<AccountInitialData>,
     ) -> SequencerConfig {
@@ -157,6 +209,7 @@ mod tests {
             block_create_timeout_millis: 1000,
             port: 8080,
             initial_accounts,
+            signing_key: *sequencer_sign_key_for_testing().value(),
         }
     }
 
@@ -298,7 +351,7 @@ mod tests {
         common_setup(&mut sequencer);
 
         let tx = common::test_utils::produce_dummy_empty_transaction();
-        let result = sequencer.transaction_pre_check(tx);
+        let result = sequencer.transaction_pre_check(parse_unwrap_tx_body_into_nssa_tx(tx));
 
         assert!(result.is_ok());
     }
@@ -324,7 +377,7 @@ mod tests {
         let tx = common::test_utils::create_transaction_native_token_transfer(
             acc1, 0, acc2, 10, sign_key1,
         );
-        let result = sequencer.transaction_pre_check(tx);
+        let result = sequencer.transaction_pre_check(parse_unwrap_tx_body_into_nssa_tx(tx));
 
         assert!(result.is_ok());
     }
@@ -352,7 +405,9 @@ mod tests {
         );
 
         // Signature is valid, stateless check pass
-        let tx = sequencer.transaction_pre_check(tx).unwrap();
+        let tx = sequencer
+            .transaction_pre_check(parse_unwrap_tx_body_into_nssa_tx(tx))
+            .unwrap();
 
         // Signature is not from sender. Execution fails
         let result = sequencer.execute_check_transaction_on_state(tx);
@@ -385,7 +440,7 @@ mod tests {
             acc1, 0, acc2, 10000000, sign_key1,
         );
 
-        let result = sequencer.transaction_pre_check(tx);
+        let result = sequencer.transaction_pre_check(parse_unwrap_tx_body_into_nssa_tx(tx));
 
         //Passed pre-check
         assert!(result.is_ok());
@@ -421,7 +476,9 @@ mod tests {
             acc1, 0, acc2, 100, sign_key1,
         );
 
-        sequencer.execute_check_transaction_on_state(tx).unwrap();
+        sequencer
+            .execute_check_transaction_on_state(parse_unwrap_tx_body_into_nssa_tx(tx))
+            .unwrap();
 
         let bal_from = sequencer
             .store
@@ -528,7 +585,7 @@ mod tests {
             .unwrap();
 
         // Only one should be included in the block
-        assert_eq!(block.transactions, vec![tx.clone()]);
+        assert_eq!(block.body.transactions, vec![tx.clone()]);
     }
 
     #[test]
@@ -563,7 +620,7 @@ mod tests {
             .block_store
             .get_block_at_id(current_height)
             .unwrap();
-        assert_eq!(block.transactions, vec![tx.clone()]);
+        assert_eq!(block.body.transactions, vec![tx.clone()]);
 
         // Add same transaction should fail
         sequencer.mempool.push_item(tx);
@@ -575,6 +632,6 @@ mod tests {
             .block_store
             .get_block_at_id(current_height)
             .unwrap();
-        assert!(block.transactions.is_empty());
+        assert!(block.body.transactions.is_empty());
     }
 }
diff --git a/sequencer_core/src/sequencer_store/block_store.rs b/sequencer_core/src/sequencer_store/block_store.rs
index 3bd68cb..42e4ec5 100644
--- a/sequencer_core/src/sequencer_store/block_store.rs
+++ b/sequencer_core/src/sequencer_store/block_store.rs
@@ -1,7 +1,7 @@
 use std::{collections::HashMap, path::Path};
 
 use anyhow::Result;
-use common::{block::Block, merkle_tree_public::TreeHashType};
+use common::{TreeHashType, block::Block, transaction::EncodedTransaction};
 use storage::RocksDBIO;
 
 pub struct SequecerBlockStore {
@@ -9,6 +9,7 @@ pub struct SequecerBlockStore {
     // TODO: Consider adding the hashmap to the database for faster recovery.
     tx_hash_to_block_map: HashMap<TreeHashType, u64>,
     pub genesis_id: u64,
+    pub signing_key: nssa::PrivateKey,
 }
 
 impl SequecerBlockStore {
@@ -16,7 +17,11 @@ impl SequecerBlockStore {
     /// Creates files if necessary.
     ///
     /// ATTENTION: Will overwrite genesis block.
-    pub fn open_db_with_genesis(location: &Path, genesis_block: Option<Block>) -> Result<Self> {
+    pub fn open_db_with_genesis(
+        location: &Path,
+        genesis_block: Option<Block>,
+        signing_key: nssa::PrivateKey,
+    ) -> Result<Self> {
         let tx_hash_to_block_map = if let Some(block) = &genesis_block {
             block_to_transactions_map(block)
         } else {
@@ -31,16 +36,17 @@ impl SequecerBlockStore {
             dbio,
             genesis_id,
             tx_hash_to_block_map,
+            signing_key,
         })
     }
 
     ///Reopening existing database
-    pub fn open_db_restart(location: &Path) -> Result<Self> {
-        SequecerBlockStore::open_db_with_genesis(location, None)
+    pub fn open_db_restart(location: &Path, signing_key: nssa::PrivateKey) -> Result<Self> {
+        SequecerBlockStore::open_db_with_genesis(location, None, signing_key)
     }
 
     pub fn get_block_at_id(&self, id: u64) -> Result<Block> {
-        Ok(self.dbio.get_block(id)?)
+        Ok(self.dbio.get_block(id)?.into_block(&self.signing_key))
     }
 
     pub fn put_block_at_id(&mut self, block: Block) -> Result<()> {
@@ -51,11 +57,11 @@ impl SequecerBlockStore {
     }
 
     /// Returns the transaction corresponding to the given hash, if it exists in the blockchain.
-    pub fn get_transaction_by_hash(&self, hash: TreeHashType) -> Option<nssa::PublicTransaction> {
+    pub fn get_transaction_by_hash(&self, hash: TreeHashType) -> Option<EncodedTransaction> {
         let block_id = self.tx_hash_to_block_map.get(&hash);
         let block = block_id.map(|&id| self.get_block_at_id(id));
         if let Some(Ok(block)) = block {
-            for transaction in block.transactions.into_iter() {
+            for transaction in block.body.transactions.into_iter() {
                 if transaction.hash() == hash {
                     return Some(transaction);
                 }
@@ -67,9 +73,10 @@ impl SequecerBlockStore {
 
 fn block_to_transactions_map(block: &Block) -> HashMap<TreeHashType, u64> {
     block
+        .body
         .transactions
         .iter()
-        .map(|transaction| (transaction.hash(), block.block_id))
+        .map(|transaction| (transaction.hash(), block.header.block_id))
         .collect()
 }
 
@@ -77,22 +84,28 @@ fn block_to_transactions_map(block: &Block) -> HashMap<TreeHashType, u64> {
 mod tests {
     use super::*;
 
+    use common::{block::HashableBlockData, test_utils::sequencer_sign_key_for_testing};
     use tempfile::tempdir;
 
     #[test]
     fn test_get_transaction_by_hash() {
         let temp_dir = tempdir().unwrap();
         let path = temp_dir.path();
-        let genesis_block = Block {
+
+        let signing_key = sequencer_sign_key_for_testing();
+
+        let genesis_block_hashable_data = HashableBlockData {
             block_id: 0,
-            prev_block_id: 0,
             prev_block_hash: [0; 32],
-            hash: [1; 32],
+            timestamp: 0,
             transactions: vec![],
         };
+
+        let genesis_block = genesis_block_hashable_data.into_block(&signing_key);
         // Start an empty node store
         let mut node_store =
-            SequecerBlockStore::open_db_with_genesis(path, Some(genesis_block)).unwrap();
+            SequecerBlockStore::open_db_with_genesis(path, Some(genesis_block), signing_key)
+                .unwrap();
 
         let tx = common::test_utils::produce_dummy_empty_transaction();
         let block = common::test_utils::produce_dummy_block(1, None, vec![tx.clone()]);
diff --git a/sequencer_core/src/sequencer_store/mod.rs b/sequencer_core/src/sequencer_store/mod.rs
index bb0a7c1..38085c7 100644
--- a/sequencer_core/src/sequencer_store/mod.rs
+++ b/sequencer_core/src/sequencer_store/mod.rs
@@ -20,14 +20,23 @@ impl SequecerChainStore {
         genesis_id: u64,
         is_genesis_random: bool,
         initial_accounts: &[AccountInitialData],
+        signing_key: nssa::PrivateKey,
     ) -> Self {
         let init_accs: Vec<(Address, u128)> = initial_accounts
             .iter()
             .map(|acc_data| (acc_data.addr.parse().unwrap(), acc_data.balance))
             .collect();
 
+        #[cfg(not(feature = "testnet"))]
         let state = nssa::V01State::new_with_genesis_accounts(&init_accs);
 
+        #[cfg(feature = "testnet")]
+        let state = {
+            let mut this = nssa::V01State::new_with_genesis_accounts(&init_accs);
+            this.add_pinata_program("cafe".repeat(16).parse().unwrap());
+            this
+        };
+
         let mut data = [0; 32];
         let mut prev_block_hash = [0; 32];
 
@@ -36,20 +45,23 @@ impl SequecerChainStore {
             OsRng.fill_bytes(&mut prev_block_hash);
         }
 
+        let curr_time = chrono::Utc::now().timestamp_millis() as u64;
+
         let hashable_data = HashableBlockData {
             block_id: genesis_id,
-            prev_block_id: genesis_id.saturating_sub(1),
             transactions: vec![],
             prev_block_hash,
+            timestamp: curr_time,
         };
 
-        let genesis_block = hashable_data.into();
+        let genesis_block = hashable_data.into_block(&signing_key);
 
         //Sequencer should panic if unable to open db,
         //as fixing this issue may require actions non-native to program scope
         let block_store = SequecerBlockStore::open_db_with_genesis(
             &home_dir.join("rocksdb"),
             Some(genesis_block),
+            signing_key,
         )
         .unwrap();
 
diff --git a/sequencer_rpc/src/process.rs b/sequencer_rpc/src/process.rs
index 1a5e2ca..00c5724 100644
--- a/sequencer_rpc/src/process.rs
+++ b/sequencer_rpc/src/process.rs
@@ -5,8 +5,8 @@ use sequencer_core::config::AccountInitialData;
 use serde_json::Value;
 
 use common::{
+    TreeHashType,
     block::HashableBlockData,
-    merkle_tree_public::TreeHashType,
     rpc_primitives::{
         errors::RpcError,
         message::{Message, Request},
@@ -18,6 +18,7 @@ use common::{
             GetTransactionByHashResponse,
         },
     },
+    transaction::EncodedTransaction,
 };
 
 use common::rpc_primitives::requests::{
@@ -74,8 +75,7 @@ impl JsonHandler {
 
     async fn process_send_tx(&self, request: Request) -> Result<Value, RpcErr> {
         let send_tx_req = SendTxRequest::parse(Some(request.params))?;
-        let tx = nssa::PublicTransaction::from_bytes(&send_tx_req.transaction)
-            .map_err(|e| RpcError::serialization_error(&e.to_string()))?;
+        let tx = EncodedTransaction::from_bytes(send_tx_req.transaction);
         let tx_hash = hex::encode(tx.hash());
 
         {
@@ -273,7 +273,10 @@ mod tests {
 
     use crate::{JsonHandler, rpc_handler};
     use base64::{Engine, engine::general_purpose};
-    use common::rpc_primitives::RpcPollingConfig;
+    use common::{
+        rpc_primitives::RpcPollingConfig, test_utils::sequencer_sign_key_for_testing,
+        transaction::EncodedTransaction,
+    };
 
     use sequencer_core::{
         SequencerCore,
@@ -317,14 +320,11 @@ mod tests {
             block_create_timeout_millis: 1000,
             port: 8080,
             initial_accounts,
+            signing_key: *sequencer_sign_key_for_testing().value(),
         }
     }
 
-    fn components_for_tests() -> (
-        JsonHandler,
-        Vec<AccountInitialData>,
-        nssa::PublicTransaction,
-    ) {
+    fn components_for_tests() -> (JsonHandler, Vec<AccountInitialData>, EncodedTransaction) {
         let config = sequencer_config_for_tests();
         let mut sequencer_core = SequencerCore::start_from_config(config);
         let initial_accounts = sequencer_core.sequencer_config.initial_accounts.clone();
diff --git a/sequencer_runner/configs/debug/sequencer_config.json b/sequencer_runner/configs/debug/sequencer_config.json
index 010a9ba..f7c6369 100644
--- a/sequencer_runner/configs/debug/sequencer_config.json
+++ b/sequencer_runner/configs/debug/sequencer_config.json
@@ -7,6 +7,13 @@
     "block_create_timeout_millis": 10000,
     "port": 3040,
     "initial_accounts": [
-        
+        {
+            "addr": "1b84c5567b126440995d3ed5aaba0565d71e1834604819ff9c17f5e9d5dd078f",
+            "balance": 10000
+        },
+        {
+            "addr": "4d4b6cd1361032ca9bd2aeb9d900aa4d45d9ead80ac9423374c451a7254d0766",
+            "balance": 20000
+        }
     ]
-}
\ No newline at end of file
+}
diff --git a/sequencer_runner/src/lib.rs b/sequencer_runner/src/lib.rs
index b682a18..068d3d7 100644
--- a/sequencer_runner/src/lib.rs
+++ b/sequencer_runner/src/lib.rs
@@ -77,7 +77,9 @@ pub async fn main_runner() -> Result<()> {
     }
 
     //ToDo: Add restart on failures
-    let (_, _) = startup_sequencer(app_config).await?;
+    let (_, main_loop_handle) = startup_sequencer(app_config).await?;
+
+    main_loop_handle.await??;
 
     Ok(())
 }
diff --git a/storage/src/lib.rs b/storage/src/lib.rs
index 9ead317..d06fc0c 100644
--- a/storage/src/lib.rs
+++ b/storage/src/lib.rs
@@ -92,7 +92,7 @@ impl RocksDBIO {
         if is_start_set {
             Ok(dbio)
         } else if let Some(block) = start_block {
-            let block_id = block.block_id;
+            let block_id = block.header.block_id;
             dbio.put_meta_first_block_in_db(block)?;
             dbio.put_meta_is_first_block_set()?;
 
@@ -186,7 +186,7 @@ impl RocksDBIO {
             .put_cf(
                 &cf_meta,
                 DB_META_FIRST_BLOCK_IN_DB_KEY.as_bytes(),
-                block.block_id.to_be_bytes(),
+                block.header.block_id.to_be_bytes(),
             )
             .map_err(|rerr| DbError::rocksdb_cast_message(rerr, None))?;
 
@@ -233,22 +233,22 @@ impl RocksDBIO {
         if !first {
             let last_curr_block = self.get_meta_last_block_in_db()?;
 
-            if block.block_id > last_curr_block {
-                self.put_meta_last_block_in_db(block.block_id)?;
+            if block.header.block_id > last_curr_block {
+                self.put_meta_last_block_in_db(block.header.block_id)?;
             }
         }
 
         self.db
             .put_cf(
                 &cf_block,
-                block.block_id.to_be_bytes(),
+                block.header.block_id.to_be_bytes(),
                 HashableBlockData::from(block).to_bytes(),
             )
             .map_err(|rerr| DbError::rocksdb_cast_message(rerr, None))?;
         Ok(())
     }
 
-    pub fn get_block(&self, block_id: u64) -> DbResult<Block> {
+    pub fn get_block(&self, block_id: u64) -> DbResult<HashableBlockData> {
         let cf_block = self.block_column();
         let res = self
             .db
@@ -256,7 +256,7 @@ impl RocksDBIO {
             .map_err(|rerr| DbError::rocksdb_cast_message(rerr, None))?;
 
         if let Some(data) = res {
-            Ok(HashableBlockData::from_bytes(&data).into())
+            Ok(HashableBlockData::from_bytes(&data))
         } else {
             Err(DbError::db_interaction_error(
                 "Block on this id not found".to_string(),
diff --git a/wallet/src/chain_storage/mod.rs b/wallet/src/chain_storage/mod.rs
index 6f4201c..d3b07b3 100644
--- a/wallet/src/chain_storage/mod.rs
+++ b/wallet/src/chain_storage/mod.rs
@@ -1,14 +1,12 @@
 use std::collections::HashMap;
 
 use anyhow::Result;
-use common::merkle_tree_public::merkle_tree::UTXOCommitmentsMerkleTree;
 use key_protocol::key_protocol_core::NSSAUserData;
 
 use crate::config::{PersistentAccountData, WalletConfig};
 
 pub struct WalletChainStore {
     pub user_data: NSSAUserData,
-    pub utxo_commitments_store: UTXOCommitmentsMerkleTree,
     pub wallet_config: WalletConfig,
 }
 
@@ -21,18 +19,14 @@ impl WalletChainStore {
             .map(|init_acc_data| (init_acc_data.address, init_acc_data.pub_sign_key))
             .collect();
 
-        let utxo_commitments_store = UTXOCommitmentsMerkleTree::new(vec![]);
-
         Ok(Self {
-            user_data: NSSAUserData::new_with_accounts(accounts_keys)?,
-            utxo_commitments_store,
+            user_data: NSSAUserData::new_with_accounts(accounts_keys, HashMap::new())?,
             wallet_config: config,
         })
     }
 
     pub(crate) fn insert_account_data(&mut self, acc_data: PersistentAccountData) {
         self.user_data
-            .key_holder
             .pub_account_signing_keys
             .insert(acc_data.address, acc_data.pub_sign_key);
     }
@@ -94,11 +88,6 @@ mod tests {
 
         let config = create_sample_wallet_config(path.to_path_buf());
 
-        let store = WalletChainStore::new(config.clone()).unwrap();
-
-        assert_eq!(
-            store.utxo_commitments_store.get_root().unwrap_or([0; 32]),
-            [0; 32]
-        );
+        let _ = WalletChainStore::new(config.clone()).unwrap();
     }
 }
diff --git a/wallet/src/helperfunctions.rs b/wallet/src/helperfunctions.rs
index dc5b2f6..e3e6119 100644
--- a/wallet/src/helperfunctions.rs
+++ b/wallet/src/helperfunctions.rs
@@ -55,7 +55,7 @@ pub fn fetch_persistent_accounts() -> Result<Vec<PersistentAccountData>> {
 pub fn produce_data_for_storage(user_data: &NSSAUserData) -> Vec<PersistentAccountData> {
     let mut vec_for_storage = vec![];
 
-    for (addr, key) in &user_data.key_holder.pub_account_signing_keys {
+    for (addr, key) in &user_data.pub_account_signing_keys {
         vec_for_storage.push(PersistentAccountData {
             address: *addr,
             pub_sign_key: key.clone(),
diff --git a/wallet/src/lib.rs b/wallet/src/lib.rs
index 1352251..8c81baf 100644
--- a/wallet/src/lib.rs
+++ b/wallet/src/lib.rs
@@ -4,6 +4,7 @@ use base64::{Engine, engine::general_purpose::STANDARD as BASE64};
 use common::{
     ExecutionFailureKind,
     sequencer_client::{SequencerClient, json::SendTxResponse},
+    transaction::{EncodedTransaction, NSSATransaction},
 };
 
 use anyhow::Result;
@@ -72,7 +73,9 @@ impl WalletCore {
     }
 
     pub fn create_new_account(&mut self) -> Address {
-        self.storage.user_data.generate_new_account()
+        self.storage
+            .user_data
+            .generate_new_public_transaction_private_key()
     }
 
     pub fn search_for_initial_account(&self, acc_addr: Address) -> Option<Account> {
@@ -84,6 +87,24 @@ impl WalletCore {
         None
     }
 
+    pub async fn claim_pinata(
+        &self,
+        pinata_addr: Address,
+        winner_addr: Address,
+        solution: u128,
+    ) -> Result<SendTxResponse, ExecutionFailureKind> {
+        let addresses = vec![pinata_addr, winner_addr];
+        let program_id = nssa::program::Program::pinata().id();
+        let message =
+            nssa::public_transaction::Message::try_new(program_id, addresses, vec![], solution)
+                .unwrap();
+
+        let witness_set = nssa::public_transaction::WitnessSet::for_message(&message, &[]);
+        let tx = nssa::PublicTransaction::new(message, witness_set);
+
+        Ok(self.sequencer_client.send_tx_public(tx).await?)
+    }
+
     pub async fn send_public_native_token_transfer(
         &self,
         from: Address,
@@ -109,7 +130,7 @@ impl WalletCore {
             )
             .unwrap();
 
-            let signing_key = self.storage.user_data.get_account_signing_key(&from);
+            let signing_key = self.storage.user_data.get_pub_account_signing_key(&from);
 
             let Some(signing_key) = signing_key else {
                 return Err(ExecutionFailureKind::KeyNotFoundError);
@@ -120,7 +141,7 @@ impl WalletCore {
 
             let tx = nssa::PublicTransaction::new(message, witness_set);
 
-            Ok(self.sequencer_client.send_tx(tx).await?)
+            Ok(self.sequencer_client.send_tx_public(tx).await?)
         } else {
             Err(ExecutionFailureKind::InsufficientFundsError)
         }
@@ -147,7 +168,7 @@ impl WalletCore {
 
         let tx = nssa::PublicTransaction::new(message, witness_set);
 
-        Ok(self.sequencer_client.send_tx(tx).await?)
+        Ok(self.sequencer_client.send_tx_public(tx).await?)
     }
 
     pub async fn send_transfer_token_transaction(
@@ -172,7 +193,7 @@ impl WalletCore {
         let Some(signing_key) = self
             .storage
             .user_data
-            .get_account_signing_key(&sender_address)
+            .get_pub_account_signing_key(&sender_address)
         else {
             return Err(ExecutionFailureKind::KeyNotFoundError);
         };
@@ -181,7 +202,7 @@ impl WalletCore {
 
         let tx = nssa::PublicTransaction::new(message, witness_set);
 
-        Ok(self.sequencer_client.send_tx(tx).await?)
+        Ok(self.sequencer_client.send_tx_public(tx).await?)
     }
     ///Get account balance
     pub async fn get_account_balance(&self, acc: Address) -> Result<u128> {
@@ -208,15 +229,12 @@ impl WalletCore {
     }
 
     ///Poll transactions
-    pub async fn poll_public_native_token_transfer(
-        &self,
-        hash: String,
-    ) -> Result<nssa::PublicTransaction> {
+    pub async fn poll_public_native_token_transfer(&self, hash: String) -> Result<NSSATransaction> {
         let transaction_encoded = self.poller.poll_tx(hash).await?;
         let tx_base64_decode = BASE64.decode(transaction_encoded)?;
-        let pub_tx = nssa::PublicTransaction::from_bytes(&tx_base64_decode)?;
+        let pub_tx = EncodedTransaction::from_bytes(tx_base64_decode);
 
-        Ok(pub_tx)
+        Ok(NSSATransaction::try_from(&pub_tx)?)
     }
 }
 
@@ -278,6 +296,19 @@ pub enum Command {
         #[arg(short, long)]
         balance_to_move: u128,
     },
+    // TODO: Testnet only. Refactor to prevent compilation on mainnet.
+    // Claim piñata prize
+    ClaimPinata {
+        ///pinata_addr - valid 32 byte hex string
+        #[arg(long)]
+        pinata_addr: String,
+        ///winner_addr - valid 32 byte hex string
+        #[arg(long)]
+        winner_addr: String,
+        ///solution - solution to pinata challenge
+        #[arg(long)]
+        solution: u128,
+    },
 }
 
 ///To execute commands, env var NSSA_WALLET_HOME_DIR must be set into directory with config
@@ -376,6 +407,20 @@ pub async fn execute_subcommand(command: Command) -> Result<()> {
                 )
                 .await?;
         }
+        Command::ClaimPinata {
+            pinata_addr,
+            winner_addr,
+            solution,
+        } => {
+            let res = wallet_core
+                .claim_pinata(
+                    pinata_addr.parse().unwrap(),
+                    winner_addr.parse().unwrap(),
+                    solution,
+                )
+                .await?;
+            info!("Results of tx send is {res:#?}");
+        }
     }
 
     Ok(())