diff --git a/README.md b/README.md
index 31dba97c..fa84d193 100644
--- a/README.md
+++ b/README.md
@@ -99,7 +99,8 @@ If bitcoind is shutdown, *insight* needs to be stopped and restarted once bitcoi
 ### DB storage requirement
 
 To store the blockchain and address related information, *insight* uses LevelDB. Two DBs are created: txs and blocks. By default these are stored on
-  ```<insight root>/db```
+  ```<user's home>/db```
+Please note that previous version's of Insight-API store that on `<insight's root>/db`
 
 this can be changed on config/config.js. As of February 2014, storing the livenet blockchain takes ~30GB of disk space (2GB for the testnet).
 
diff --git a/config/config.js b/config/config.js
index bb020097..f59a8f2f 100644
--- a/config/config.js
+++ b/config/config.js
@@ -1,6 +1,7 @@
 'use strict';
 
 var path = require('path'),
+    fs = require('fs'),
     rootPath = path.normalize(__dirname + '/..'),
     env,
     db,
@@ -8,16 +9,23 @@ var path = require('path'),
     b_port,
     p2p_port;
 
+
+function getUserHome() {
+    return process.env[(process.platform == 'win32') ? 'USERPROFILE' : 'HOME'];
+}
+
+var home = process.env.INSIGHT_DB || ( getUserHome()  + '/insight-api-db' );
+
 if (process.env.INSIGHT_NETWORK === 'livenet') {
   env = 'livenet';
-  db = rootPath + '/db';
+  db = home;
   port = '3000';
   b_port = '8332';
   p2p_port = '8333';
 }
 else {
   env = 'testnet';
-  db = rootPath + '/db/testnet';
+  db = home + '/testnet';
   port = '3001';
   b_port = '18332';
   p2p_port = '18333';
@@ -48,6 +56,13 @@ if (!dataDir) {
 }
 dataDir += network === 'testnet' ? 'testnet3' : '';
 
+
+if (! fs.existsSync(db)){
+
+  console.log('## ERROR ##\n\tDB Directory "%s" not found. \n\tCreate it, move your old DB there or set the INSIGHT_DB environment variable.\n\tNOTE: In older insight-api versions, db was stored at <insight-root>/db', db);
+  process.exit(-1);
+}
+
 module.exports = {
   root: rootPath,
   publicPath: process.env.INSIGHT_PUBLIC_PATH || false,
diff --git a/lib/TransactionDb.js b/lib/TransactionDb.js
index a33bd195..e2db7dcb 100644
--- a/lib/TransactionDb.js
+++ b/lib/TransactionDb.js
@@ -30,6 +30,8 @@ var Rpc   = imports.rpc || require('./Rpc'),
   async   = require('async'),
   config  = require('../config/config'),
   assert  = require('assert');
+
+
 var db    = imports.db || levelup(config.leveldb + '/txs',{maxOpenFiles: MAX_OPEN_FILES} );
 var Script       = require('bitcore/Script');
 // This is 0.1.2 = > c++ version of base57-native