diff --git a/qa/rpc-tests/maxuploadtarget.py b/qa/rpc-tests/maxuploadtarget.py
index 5087f0762..125d4eb27 100755
--- a/qa/rpc-tests/maxuploadtarget.py
+++ b/qa/rpc-tests/maxuploadtarget.py
@@ -97,7 +97,7 @@ class MaxUploadTest(BitcoinTestFramework):
     def setup_network(self):
         # Start a node with maxuploadtarget of 200 MB (/24h)
         self.nodes = []
-        self.nodes.append(start_node(0, self.options.tmpdir, ["-debug", "-maxuploadtarget=200", "-blockmaxsize=999000"]))
+        self.nodes.append(start_node(0, self.options.tmpdir, ["-debug", "-maxuploadtarget=800", "-blockmaxsize=999000"]))
 
     def mine_full_block(self, node, address):
         # Want to create a full block
@@ -175,13 +175,13 @@ class MaxUploadTest(BitcoinTestFramework):
         getdata_request = msg_getdata()
         getdata_request.inv.append(CInv(2, big_old_block))
 
-        max_bytes_per_day = 200*1024*1024
-        daily_buffer = 144 * MAX_BLOCK_SIZE
+        max_bytes_per_day = 800*1024*1024
+        daily_buffer = 144 * 4000000
         max_bytes_available = max_bytes_per_day - daily_buffer
         success_count = max_bytes_available // old_block_size
 
-        # 144MB will be reserved for relaying new blocks, so expect this to
-        # succeed for ~70 tries.
+        # 576MB will be reserved for relaying new blocks, so expect this to
+        # succeed for ~235 tries.
         for i in range(success_count):
             test_nodes[0].send_message(getdata_request)
             test_nodes[0].sync_with_ping()
@@ -198,9 +198,9 @@ class MaxUploadTest(BitcoinTestFramework):
 
         # Requesting the current block on test_nodes[1] should succeed indefinitely,
         # even when over the max upload target.
-        # We'll try 200 times
+        # We'll try 800 times
         getdata_request.inv = [CInv(2, big_new_block)]
-        for i in range(200):
+        for i in range(800):
             test_nodes[1].send_message(getdata_request)
             test_nodes[1].sync_with_ping()
             assert_equal(test_nodes[1].block_receive_map[big_new_block], i+1)
diff --git a/src/bitcoin-tx.cpp b/src/bitcoin-tx.cpp
index 424812a6d..e77aa6c72 100644
--- a/src/bitcoin-tx.cpp
+++ b/src/bitcoin-tx.cpp
@@ -195,7 +195,7 @@ static void MutateTxAddInput(CMutableTransaction& tx, const string& strInput)
     uint256 txid(uint256S(strTxid));
 
     static const unsigned int minTxOutSz = 9;
-    static const unsigned int maxVout = MAX_BLOCK_SIZE / minTxOutSz;
+    static const unsigned int maxVout = MAX_BLOCK_BASE_SIZE / minTxOutSz;
 
     // extract and validate vout
     string strVout = vStrInputParts[1];
diff --git a/src/blockencodings.cpp b/src/blockencodings.cpp
index 7fd6a9cf5..5c4c3bd27 100644
--- a/src/blockencodings.cpp
+++ b/src/blockencodings.cpp
@@ -15,7 +15,7 @@
 
 #include <unordered_map>
 
-#define MIN_TRANSACTION_SIZE (::GetSerializeSize(CTransaction(), SER_NETWORK, PROTOCOL_VERSION))
+#define MIN_TRANSACTION_BASE_SIZE (::GetSerializeSize(CTransaction(), SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS))
 
 CBlockHeaderAndShortTxIDs::CBlockHeaderAndShortTxIDs(const CBlock& block) :
         nonce(GetRand(std::numeric_limits<uint64_t>::max())),
@@ -50,7 +50,7 @@ uint64_t CBlockHeaderAndShortTxIDs::GetShortID(const uint256& txhash) const {
 ReadStatus PartiallyDownloadedBlock::InitData(const CBlockHeaderAndShortTxIDs& cmpctblock) {
     if (cmpctblock.header.IsNull() || (cmpctblock.shorttxids.empty() && cmpctblock.prefilledtxn.empty()))
         return READ_STATUS_INVALID;
-    if (cmpctblock.shorttxids.size() + cmpctblock.prefilledtxn.size() > MAX_BLOCK_SIZE / MIN_TRANSACTION_SIZE)
+    if (cmpctblock.shorttxids.size() + cmpctblock.prefilledtxn.size() > MAX_BLOCK_BASE_SIZE / MIN_TRANSACTION_BASE_SIZE)
         return READ_STATUS_INVALID;
 
     assert(header.IsNull() && txn_available.empty());
diff --git a/src/consensus/consensus.h b/src/consensus/consensus.h
index ad9cc2617..81f40593b 100644
--- a/src/consensus/consensus.h
+++ b/src/consensus/consensus.h
@@ -6,10 +6,16 @@
 #ifndef BITCOIN_CONSENSUS_CONSENSUS_H
 #define BITCOIN_CONSENSUS_CONSENSUS_H
 
-/** The maximum allowed size for a serialized block, in bytes (network rule) */
-static const unsigned int MAX_BLOCK_SIZE = 1000000;
+#include <stdint.h>
+
+/** The maximum allowed size for a serialized block, in bytes (only for buffer size limits) */
+static const unsigned int MAX_BLOCK_SERIALIZED_SIZE = 4000000;
+/** The maximum allowed cost for a block, see BIP 141 (network rule) */
+static const unsigned int MAX_BLOCK_COST = 4000000;
+/** The maximum allowed size for a block excluding witness data, in bytes (network rule) */
+static const unsigned int MAX_BLOCK_BASE_SIZE = 1000000;
 /** The maximum allowed number of signature check operations in a block (network rule) */
-static const unsigned int MAX_BLOCK_SIGOPS = MAX_BLOCK_SIZE/50;
+static const int64_t MAX_BLOCK_SIGOPS_COST = 80000;
 /** Coinbase transaction outputs can only be spent after this number of new blocks (network rule) */
 static const int COINBASE_MATURITY = 100;
 
diff --git a/src/init.cpp b/src/init.cpp
index 6bce0a9b4..e924d504b 100644
--- a/src/init.cpp
+++ b/src/init.cpp
@@ -452,6 +452,7 @@ std::string HelpMessage(HelpMessageMode mode)
     strUsage += HelpMessageOpt("-mempoolreplacement", strprintf(_("Enable transaction replacement in the memory pool (default: %u)"), DEFAULT_ENABLE_REPLACEMENT));
 
     strUsage += HelpMessageGroup(_("Block creation options:"));
+    strUsage += HelpMessageOpt("-blockmaxcost=<n>", strprintf(_("Set maximum block cost (default: %d)"), DEFAULT_BLOCK_MAX_COST));
     strUsage += HelpMessageOpt("-blockminsize=<n>", strprintf(_("Set minimum block size in bytes (default: %u)"), DEFAULT_BLOCK_MIN_SIZE));
     strUsage += HelpMessageOpt("-blockmaxsize=<n>", strprintf(_("Set maximum block size in bytes (default: %d)"), DEFAULT_BLOCK_MAX_SIZE));
     strUsage += HelpMessageOpt("-blockprioritysize=<n>", strprintf(_("Set maximum size of high-priority/low-fee transactions in bytes (default: %d)"), DEFAULT_BLOCK_PRIORITY_SIZE));
diff --git a/src/main.cpp b/src/main.cpp
index c22faf6db..df758bc41 100644
--- a/src/main.cpp
+++ b/src/main.cpp
@@ -684,8 +684,8 @@ bool AddOrphanTx(const CTransaction& tx, NodeId peer) EXCLUSIVE_LOCKS_REQUIRED(c
     // have been mined or received.
     // 100 orphans, each of which is at most 99,999 bytes big is
     // at most 10 megabytes of orphans and somewhat more byprev index (in the worst case):
-    unsigned int sz = tx.GetSerializeSize(SER_NETWORK, CTransaction::CURRENT_VERSION);
-    if (sz >= MAX_STANDARD_TX_SIZE)
+    unsigned int sz = GetTransactionCost(tx);
+    if (sz >= MAX_STANDARD_TX_COST)
     {
         LogPrint("mempool", "ignoring large orphan tx (size: %u, hash: %s)\n", sz, hash.ToString());
         return false;
@@ -1018,8 +1018,24 @@ unsigned int GetP2SHSigOpCount(const CTransaction& tx, const CCoinsViewCache& in
     return nSigOps;
 }
 
+int64_t GetTransactionSigOpCost(const CTransaction& tx, const CCoinsViewCache& inputs, int flags)
+{
+    int64_t nSigOps = GetLegacySigOpCount(tx) * WITNESS_SCALE_FACTOR;
 
+    if (tx.IsCoinBase())
+        return nSigOps;
 
+    if (flags & SCRIPT_VERIFY_P2SH) {
+        nSigOps += GetP2SHSigOpCount(tx, inputs) * WITNESS_SCALE_FACTOR;
+    }
+
+    for (unsigned int i = 0; i < tx.vin.size(); i++)
+    {
+        const CTxOut &prevout = inputs.GetOutputFor(tx.vin[i]);
+        nSigOps += CountWitnessSigOps(tx.vin[i].scriptSig, prevout.scriptPubKey, i < tx.wit.vtxinwit.size() ? &tx.wit.vtxinwit[i].scriptWitness : NULL, flags);
+    }
+    return nSigOps;
+}
 
 
 
@@ -1033,7 +1049,7 @@ bool CheckTransaction(const CTransaction& tx, CValidationState &state)
     if (tx.vout.empty())
         return state.DoS(10, false, REJECT_INVALID, "bad-txns-vout-empty");
     // Size limits (this doesn't take the witness into account, as that hasn't been checked for malleability)
-    if (::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) > MAX_BLOCK_SIZE)
+    if (::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) > MAX_BLOCK_BASE_SIZE)
         return state.DoS(100, false, REJECT_INVALID, "bad-txns-oversize");
 
     // Check for negative or overflow output values
@@ -1239,8 +1255,7 @@ bool AcceptToMemoryPoolWorker(CTxMemPool& pool, CValidationState& state, const C
         if (fRequireStandard && !AreInputsStandard(tx, view))
             return state.Invalid(false, REJECT_NONSTANDARD, "bad-txns-nonstandard-inputs");
 
-        unsigned int nSigOps = GetLegacySigOpCount(tx);
-        nSigOps += GetP2SHSigOpCount(tx, view);
+        int64_t nSigOpsCost = GetTransactionSigOpCost(tx, view, STANDARD_SCRIPT_VERIFY_FLAGS);
 
         CAmount nValueOut = tx.GetValueOut();
         CAmount nFees = nValueIn-nValueOut;
@@ -1263,7 +1278,7 @@ bool AcceptToMemoryPoolWorker(CTxMemPool& pool, CValidationState& state, const C
             }
         }
 
-        CTxMemPoolEntry entry(tx, nFees, GetTime(), dPriority, chainActive.Height(), pool.HasNoInputsOf(tx), inChainInputValue, fSpendsCoinbase, nSigOps, lp);
+        CTxMemPoolEntry entry(tx, nFees, GetTime(), dPriority, chainActive.Height(), pool.HasNoInputsOf(tx), inChainInputValue, fSpendsCoinbase, nSigOpsCost, lp);
         unsigned int nSize = entry.GetTxSize();
 
         // Check that the transaction doesn't have an excessive number of
@@ -1271,9 +1286,9 @@ bool AcceptToMemoryPoolWorker(CTxMemPool& pool, CValidationState& state, const C
         // itself can contain sigops MAX_STANDARD_TX_SIGOPS is less than
         // MAX_BLOCK_SIGOPS; we still consider this an invalid rather than
         // merely non-standard transaction.
-        if ((nSigOps > MAX_STANDARD_TX_SIGOPS) || (nBytesPerSigOp && nSigOps > nSize / nBytesPerSigOp))
+        if ((nSigOpsCost > MAX_STANDARD_TX_SIGOPS_COST) || (nBytesPerSigOp && nSigOpsCost > nSize * WITNESS_SCALE_FACTOR / nBytesPerSigOp))
             return state.DoS(0, false, REJECT_NONSTANDARD, "bad-txns-too-many-sigops", false,
-                strprintf("%d", nSigOps));
+                strprintf("%d", nSigOpsCost));
 
         CAmount mempoolRejectFee = pool.GetMinFee(GetArg("-maxmempool", DEFAULT_MAX_MEMPOOL_SIZE) * 1000000).GetFee(nSize);
         if (mempoolRejectFee > 0 && nModifiedFees < mempoolRejectFee) {
@@ -2439,7 +2454,7 @@ bool ConnectBlock(const CBlock& block, CValidationState& state, CBlockIndex* pin
     std::vector<int> prevheights;
     CAmount nFees = 0;
     int nInputs = 0;
-    unsigned int nSigOps = 0;
+    int64_t nSigOpsCost = 0;
     CDiskTxPos pos(pindex->GetBlockPos(), GetSizeOfCompactSize(block.vtx.size()));
     std::vector<std::pair<uint256, CDiskTxPos> > vPos;
     vPos.reserve(block.vtx.size());
@@ -2449,10 +2464,6 @@ bool ConnectBlock(const CBlock& block, CValidationState& state, CBlockIndex* pin
         const CTransaction &tx = block.vtx[i];
 
         nInputs += tx.vin.size();
-        nSigOps += GetLegacySigOpCount(tx);
-        if (nSigOps > MAX_BLOCK_SIGOPS)
-            return state.DoS(100, error("ConnectBlock(): too many sigops"),
-                             REJECT_INVALID, "bad-blk-sigops");
 
         if (!tx.IsCoinBase())
         {
@@ -2483,18 +2494,19 @@ bool ConnectBlock(const CBlock& block, CValidationState& state, CBlockIndex* pin
                 return state.DoS(100, error("%s: contains a non-BIP68-final transaction", __func__),
                                  REJECT_INVALID, "bad-txns-nonfinal");
             }
+        }
 
-            if (fStrictPayToScriptHash)
-            {
-                // Add in sigops done by pay-to-script-hash inputs;
-                // this is to prevent a "rogue miner" from creating
-                // an incredibly-expensive-to-validate block.
-                nSigOps += GetP2SHSigOpCount(tx, view);
-                if (nSigOps > MAX_BLOCK_SIGOPS)
-                    return state.DoS(100, error("ConnectBlock(): too many sigops"),
-                                     REJECT_INVALID, "bad-blk-sigops");
-            }
+        // GetTransactionSigOpCost counts 3 types of sigops:
+        // * legacy (always)
+        // * p2sh (when P2SH enabled in flags and excludes coinbase)
+        // * witness (when witness enabled in flags and excludes coinbase)
+        nSigOpsCost += GetTransactionSigOpCost(tx, view, flags);
+        if (nSigOpsCost > MAX_BLOCK_SIGOPS_COST)
+            return state.DoS(100, error("ConnectBlock(): too many sigops"),
+                             REJECT_INVALID, "bad-blk-sigops");
 
+        if (!tx.IsCoinBase())
+        {
             nFees += view.GetValueIn(tx)-tx.GetValueOut();
 
             std::vector<CScriptCheck> vChecks;
@@ -3417,9 +3429,11 @@ bool CheckBlock(const CBlock& block, CValidationState& state, const Consensus::P
     // All potential-corruption validation must be done before we do any
     // transaction validation, as otherwise we may mark the header as invalid
     // because we receive the wrong transactions for it.
+    // Note that witness malleability is checked in ContextualCheckBlock, so no
+    // checks that use witness data may be performed here.
 
     // Size limits
-    if (block.vtx.empty() || block.vtx.size() > MAX_BLOCK_SIZE || ::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) > MAX_BLOCK_SIZE)
+    if (block.vtx.empty() || block.vtx.size() > MAX_BLOCK_BASE_SIZE || ::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) > MAX_BLOCK_BASE_SIZE)
         return state.DoS(100, false, REJECT_INVALID, "bad-blk-length", false, "size limits failed");
 
     // First transaction must be coinbase, the rest must not be
@@ -3440,7 +3454,7 @@ bool CheckBlock(const CBlock& block, CValidationState& state, const Consensus::P
     {
         nSigOps += GetLegacySigOpCount(tx);
     }
-    if (nSigOps > MAX_BLOCK_SIGOPS)
+    if (nSigOps * WITNESS_SCALE_FACTOR > MAX_BLOCK_SIGOPS_COST)
         return state.DoS(100, false, REJECT_INVALID, "bad-blk-sigops", false, "out-of-bounds SigOpCount");
 
     if (fCheckPOW && fCheckMerkleRoot)
@@ -3621,6 +3635,16 @@ bool ContextualCheckBlock(const CBlock& block, CValidationState& state, CBlockIn
         }
     }
 
+    // After the coinbase witness nonce and commitment are verified,
+    // we can check if the block cost passes (before we've checked the
+    // coinbase witness, it would be possible for the cost to be too
+    // large by filling up the coinbase witness, which doesn't change
+    // the block hash, so we couldn't mark the block as permanently
+    // failed).
+    if (GetBlockCost(block) > MAX_BLOCK_COST) {
+        return state.DoS(100, error("ContextualCheckBlock(): cost limit failed"), REJECT_INVALID, "bad-blk-cost");
+    }
+
     return true;
 }
 
@@ -4284,7 +4308,7 @@ bool LoadExternalBlockFile(const CChainParams& chainparams, FILE* fileIn, CDiskB
     int nLoaded = 0;
     try {
         // This takes over fileIn and calls fclose() on it in the CBufferedFile destructor
-        CBufferedFile blkdat(fileIn, 2*MAX_BLOCK_SIZE, MAX_BLOCK_SIZE+8, SER_DISK, CLIENT_VERSION);
+        CBufferedFile blkdat(fileIn, 2*MAX_BLOCK_SERIALIZED_SIZE, MAX_BLOCK_SERIALIZED_SIZE+8, SER_DISK, CLIENT_VERSION);
         uint64_t nRewind = blkdat.GetPos();
         while (!blkdat.eof()) {
             boost::this_thread::interruption_point();
@@ -4303,7 +4327,7 @@ bool LoadExternalBlockFile(const CChainParams& chainparams, FILE* fileIn, CDiskB
                     continue;
                 // read size
                 blkdat >> nSize;
-                if (nSize < 80 || nSize > MAX_BLOCK_SIZE)
+                if (nSize < 80 || nSize > MAX_BLOCK_SERIALIZED_SIZE)
                     continue;
             } catch (const std::exception&) {
                 // no valid block header found; don't complain
diff --git a/src/main.h b/src/main.h
index 6dd4b1aa3..317470e3c 100644
--- a/src/main.h
+++ b/src/main.h
@@ -152,6 +152,7 @@ typedef boost::unordered_map<uint256, CBlockIndex*, BlockHasher> BlockMap;
 extern BlockMap mapBlockIndex;
 extern uint64_t nLastBlockTx;
 extern uint64_t nLastBlockSize;
+extern uint64_t nLastBlockCost;
 extern const std::string strMessageMagic;
 extern CWaitableCriticalSection csBestBlock;
 extern CConditionVariable cvBlockChange;
diff --git a/src/merkleblock.cpp b/src/merkleblock.cpp
index dca4973cc..31332526a 100644
--- a/src/merkleblock.cpp
+++ b/src/merkleblock.cpp
@@ -155,7 +155,7 @@ uint256 CPartialMerkleTree::ExtractMatches(std::vector<uint256> &vMatch, std::ve
     if (nTransactions == 0)
         return uint256();
     // check for excessively high numbers of transactions
-    if (nTransactions > MAX_BLOCK_SIZE / 60) // 60 is the lower bound for the size of a serialized CTransaction
+    if (nTransactions > MAX_BLOCK_BASE_SIZE / 60) // 60 is the lower bound for the size of a serialized CTransaction
         return uint256();
     // there can never be more hashes provided than one for every txid
     if (vHash.size() > nTransactions)
diff --git a/src/miner.cpp b/src/miner.cpp
index a7bf9ae84..cfc2dae56 100644
--- a/src/miner.cpp
+++ b/src/miner.cpp
@@ -45,6 +45,7 @@ using namespace std;
 
 uint64_t nLastBlockTx = 0;
 uint64_t nLastBlockSize = 0;
+uint64_t nLastBlockCost = 0;
 
 class ScoreCompare
 {
@@ -75,15 +76,36 @@ int64_t UpdateTime(CBlockHeader* pblock, const Consensus::Params& consensusParam
 BlockAssembler::BlockAssembler(const CChainParams& _chainparams)
     : chainparams(_chainparams)
 {
-    // Largest block you're willing to create:
-    nBlockMaxSize = GetArg("-blockmaxsize", DEFAULT_BLOCK_MAX_SIZE);
-    // Limit to between 1K and MAX_BLOCK_SIZE-1K for sanity:
-    nBlockMaxSize = std::max((unsigned int)1000, std::min((unsigned int)(MAX_BLOCK_SIZE-1000), nBlockMaxSize));
+    // Block resource limits
+    // If neither -blockmaxsize or -blockmaxcost is given, limit to DEFAULT_BLOCK_MAX_*
+    // If only one is given, only restrict the specified resource.
+    // If both are given, restrict both.
+    nBlockMaxCost = DEFAULT_BLOCK_MAX_COST;
+    nBlockMaxSize = DEFAULT_BLOCK_MAX_SIZE;
+    bool fCostSet = false;
+    if (mapArgs.count("-blockmaxcost")) {
+        nBlockMaxCost = GetArg("-blockmaxcost", DEFAULT_BLOCK_MAX_COST);
+        nBlockMaxSize = MAX_BLOCK_SERIALIZED_SIZE;
+        fCostSet = true;
+    }
+    if (mapArgs.count("-blockmaxsize")) {
+        nBlockMaxSize = GetArg("-blockmaxsize", DEFAULT_BLOCK_MAX_SIZE);
+        if (!fCostSet) {
+            nBlockMaxCost = nBlockMaxSize * WITNESS_SCALE_FACTOR;
+        }
+    }
+    // Limit cost to between 4K and MAX_BLOCK_COST-4K for sanity:
+    nBlockMaxCost = std::max((unsigned int)4000, std::min((unsigned int)(MAX_BLOCK_COST-4000), nBlockMaxCost));
+    // Limit size to between 1K and MAX_BLOCK_SERIALIZED_SIZE-1K for sanity:
+    nBlockMaxSize = std::max((unsigned int)1000, std::min((unsigned int)(MAX_BLOCK_SERIALIZED_SIZE-1000), nBlockMaxSize));
 
     // Minimum block size you want to create; block will be filled with free transactions
     // until there are no more or the block reaches this size:
     nBlockMinSize = GetArg("-blockminsize", DEFAULT_BLOCK_MIN_SIZE);
     nBlockMinSize = std::min(nBlockMaxSize, nBlockMinSize);
+
+    // Whether we need to account for byte usage (in addition to cost usage)
+    fNeedSizeAccounting = (nBlockMaxSize < MAX_BLOCK_SERIALIZED_SIZE-1000) || (nBlockMinSize > 0);
 }
 
 void BlockAssembler::resetBlock()
@@ -92,7 +114,8 @@ void BlockAssembler::resetBlock()
 
     // Reserve space for coinbase tx
     nBlockSize = 1000;
-    nBlockSigOps = 100;
+    nBlockCost = 4000;
+    nBlockSigOpsCost = 400;
     fIncludeWitness = false;
 
     // These counters do not include coinbase tx
@@ -116,7 +139,7 @@ CBlockTemplate* BlockAssembler::CreateNewBlock(const CScript& scriptPubKeyIn)
     // Add dummy coinbase tx as first transaction
     pblock->vtx.push_back(CTransaction());
     pblocktemplate->vTxFees.push_back(-1); // updated at end
-    pblocktemplate->vTxSigOps.push_back(-1); // updated at end
+    pblocktemplate->vTxSigOpsCost.push_back(-1); // updated at end
 
     LOCK2(cs_main, mempool.cs);
     CBlockIndex* pindexPrev = chainActive.Tip();
@@ -144,11 +167,18 @@ CBlockTemplate* BlockAssembler::CreateNewBlock(const CScript& scriptPubKeyIn)
     fIncludeWitness = IsWitnessEnabled(pindexPrev, chainparams.GetConsensus());
 
     addPriorityTxs();
-    addPackageTxs();
+    if (fNeedSizeAccounting) {
+        // addPackageTxs (the CPFP-based algorithm) cannot deal with size based
+        // accounting, so fall back to the old algorithm.
+        addScoreTxs();
+    } else {
+        addPackageTxs();
+    }
 
     nLastBlockTx = nBlockTx;
     nLastBlockSize = nBlockSize;
-    LogPrintf("CreateNewBlock(): total size %u txs: %u fees: %ld sigops %d\n", nBlockSize, nBlockTx, nFees, nBlockSigOps);
+    nLastBlockCost = nBlockCost;
+    LogPrintf("CreateNewBlock(): total size %u txs: %u fees: %ld sigops %d\n", nBlockSize, nBlockTx, nFees, nBlockSigOpsCost);
 
     // Create coinbase transaction.
     CMutableTransaction coinbaseTx;
@@ -167,7 +197,7 @@ CBlockTemplate* BlockAssembler::CreateNewBlock(const CScript& scriptPubKeyIn)
     UpdateTime(pblock, chainparams.GetConsensus(), pindexPrev);
     pblock->nBits          = GetNextWorkRequired(pindexPrev, pblock, chainparams.GetConsensus());
     pblock->nNonce         = 0;
-    pblocktemplate->vTxSigOps[0] = GetLegacySigOpCount(pblock->vtx[0]);
+    pblocktemplate->vTxSigOpsCost[0] = GetLegacySigOpCount(pblock->vtx[0]);
 
     CValidationState state;
     if (!TestBlockValidity(state, chainparams, *pblock, pindexPrev, false, false)) {
@@ -201,11 +231,12 @@ void BlockAssembler::onlyUnconfirmed(CTxMemPool::setEntries& testSet)
     }
 }
 
-bool BlockAssembler::TestPackage(uint64_t packageSize, unsigned int packageSigOps)
+bool BlockAssembler::TestPackage(uint64_t packageSize, int64_t packageSigOpsCost)
 {
-    if (nBlockSize + packageSize >= nBlockMaxSize)
+    // TODO: switch to cost-based accounting for packages instead of vsize-based accounting.
+    if (nBlockCost + WITNESS_SCALE_FACTOR * packageSize >= nBlockMaxCost)
         return false;
-    if (nBlockSigOps + packageSigOps >= MAX_BLOCK_SIGOPS)
+    if (nBlockSigOpsCost + packageSigOpsCost >= MAX_BLOCK_SIGOPS_COST)
         return false;
     return true;
 }
@@ -223,26 +254,39 @@ bool BlockAssembler::TestPackageFinality(const CTxMemPool::setEntries& package)
 
 bool BlockAssembler::TestForBlock(CTxMemPool::txiter iter)
 {
-    if (nBlockSize + iter->GetTxSize() >= nBlockMaxSize) {
+    if (nBlockCost + iter->GetTxCost() >= nBlockMaxCost) {
         // If the block is so close to full that no more txs will fit
         // or if we've tried more than 50 times to fill remaining space
         // then flag that the block is finished
-        if (nBlockSize >  nBlockMaxSize - 100 || lastFewTxs > 50) {
+        if (nBlockCost >  nBlockMaxCost - 400 || lastFewTxs > 50) {
              blockFinished = true;
              return false;
         }
-        // Once we're within 1000 bytes of a full block, only look at 50 more txs
+        // Once we're within 4000 cost of a full block, only look at 50 more txs
         // to try to fill the remaining space.
-        if (nBlockSize > nBlockMaxSize - 1000) {
+        if (nBlockCost > nBlockMaxCost - 4000) {
             lastFewTxs++;
         }
         return false;
     }
 
-    if (nBlockSigOps + iter->GetSigOpCount() >= MAX_BLOCK_SIGOPS) {
+    if (fNeedSizeAccounting) {
+        if (nBlockSize + ::GetSerializeSize(iter->GetTx(), SER_NETWORK, PROTOCOL_VERSION) >= nBlockMaxSize) {
+            if (nBlockSize >  nBlockMaxSize - 100 || lastFewTxs > 50) {
+                 blockFinished = true;
+                 return false;
+            }
+            if (nBlockSize > nBlockMaxSize - 1000) {
+                lastFewTxs++;
+            }
+            return false;
+        }
+    }
+
+    if (nBlockSigOpsCost + iter->GetSigOpCost() >= MAX_BLOCK_SIGOPS_COST) {
         // If the block has room for no more sig ops then
         // flag that the block is finished
-        if (nBlockSigOps > MAX_BLOCK_SIGOPS - 2) {
+        if (nBlockSigOpsCost > MAX_BLOCK_SIGOPS_COST - 8) {
             blockFinished = true;
             return false;
         }
@@ -264,10 +308,13 @@ void BlockAssembler::AddToBlock(CTxMemPool::txiter iter)
 {
     pblock->vtx.push_back(iter->GetTx());
     pblocktemplate->vTxFees.push_back(iter->GetFee());
-    pblocktemplate->vTxSigOps.push_back(iter->GetSigOpCount());
-    nBlockSize += iter->GetTxSize();
+    pblocktemplate->vTxSigOpsCost.push_back(iter->GetSigOpCost());
+    if (fNeedSizeAccounting) {
+        nBlockSize += ::GetSerializeSize(iter->GetTx(), SER_NETWORK, PROTOCOL_VERSION);
+    }
+    nBlockCost += iter->GetTxCost();
     ++nBlockTx;
-    nBlockSigOps += iter->GetSigOpCount();
+    nBlockSigOpsCost += iter->GetSigOpCost();
     nFees += iter->GetFee();
     inBlock.insert(iter);
 
@@ -358,7 +405,7 @@ void BlockAssembler::UpdatePackagesForAdded(const CTxMemPool::setEntries& alread
                 CTxMemPoolModifiedEntry modEntry(desc);
                 modEntry.nSizeWithAncestors -= it->GetTxSize();
                 modEntry.nModFeesWithAncestors -= it->GetModifiedFee();
-                modEntry.nSigOpCountWithAncestors -= it->GetSigOpCount();
+                modEntry.nSigOpCostWithAncestors -= it->GetSigOpCost();
                 mapModifiedTx.insert(modEntry);
             } else {
                 mapModifiedTx.modify(mit, update_for_parent_inclusion(it));
@@ -460,19 +507,19 @@ void BlockAssembler::addPackageTxs()
 
         uint64_t packageSize = iter->GetSizeWithAncestors();
         CAmount packageFees = iter->GetModFeesWithAncestors();
-        unsigned int packageSigOps = iter->GetSigOpCountWithAncestors();
+        int64_t packageSigOpsCost = iter->GetSigOpCostWithAncestors();
         if (fUsingModified) {
             packageSize = modit->nSizeWithAncestors;
             packageFees = modit->nModFeesWithAncestors;
-            packageSigOps = modit->nSigOpCountWithAncestors;
+            packageSigOpsCost = modit->nSigOpCostWithAncestors;
         }
 
-        if (packageFees < ::minRelayTxFee.GetFee(packageSize) && nBlockSize >= nBlockMinSize) {
+        if (packageFees < ::minRelayTxFee.GetFee(packageSize)) {
             // Everything else we might consider has a lower fee rate
             return;
         }
 
-        if (!TestPackage(packageSize, packageSigOps)) {
+        if (!TestPackage(packageSize, packageSigOpsCost)) {
             if (fUsingModified) {
                 // Since we always look at the best entry in mapModifiedTx,
                 // we must erase failed entries so that we can consider the
@@ -526,6 +573,8 @@ void BlockAssembler::addPriorityTxs()
         return;
     }
 
+    fNeedSizeAccounting = true;
+
     // This vector will be sorted into a priority queue:
     vector<TxCoinAgePriority> vecPriority;
     TxCoinAgePriorityCompare pricomparer;
diff --git a/src/miner.h b/src/miner.h
index 8bfc1493d..b303a8fa3 100644
--- a/src/miner.h
+++ b/src/miner.h
@@ -28,7 +28,7 @@ struct CBlockTemplate
 {
     CBlock block;
     std::vector<CAmount> vTxFees;
-    std::vector<int64_t> vTxSigOps;
+    std::vector<int64_t> vTxSigOpsCost;
     std::vector<unsigned char> vchCoinbaseCommitment;
 };
 
@@ -40,13 +40,13 @@ struct CTxMemPoolModifiedEntry {
         iter = entry;
         nSizeWithAncestors = entry->GetSizeWithAncestors();
         nModFeesWithAncestors = entry->GetModFeesWithAncestors();
-        nSigOpCountWithAncestors = entry->GetSigOpCountWithAncestors();
+        nSigOpCostWithAncestors = entry->GetSigOpCostWithAncestors();
     }
 
     CTxMemPool::txiter iter;
     uint64_t nSizeWithAncestors;
     CAmount nModFeesWithAncestors;
-    unsigned int nSigOpCountWithAncestors;
+    int64_t nSigOpCostWithAncestors;
 };
 
 /** Comparator for CTxMemPool::txiter objects.
@@ -124,7 +124,7 @@ struct update_for_parent_inclusion
     {
         e.nModFeesWithAncestors -= iter->GetFee();
         e.nSizeWithAncestors -= iter->GetTxSize();
-        e.nSigOpCountWithAncestors -= iter->GetSigOpCount();
+        e.nSigOpCostWithAncestors -= iter->GetSigOpCost();
     }
 
     CTxMemPool::txiter iter;
@@ -141,12 +141,14 @@ private:
 
     // Configuration parameters for the block size
     bool fIncludeWitness;
-    unsigned int nBlockMaxSize, nBlockMinSize;
+    unsigned int nBlockMaxCost, nBlockMaxSize, nBlockMinSize;
+    bool fNeedSizeAccounting;
 
     // Information on the current status of the block
+    uint64_t nBlockCost;
     uint64_t nBlockSize;
     uint64_t nBlockTx;
-    unsigned int nBlockSigOps;
+    uint64_t nBlockSigOpsCost;
     CAmount nFees;
     CTxMemPool::setEntries inBlock;
 
@@ -189,7 +191,7 @@ private:
     /** Remove confirmed (inBlock) entries from given set */
     void onlyUnconfirmed(CTxMemPool::setEntries& testSet);
     /** Test if a new package would "fit" in the block */
-    bool TestPackage(uint64_t packageSize, unsigned int packageSigOps);
+    bool TestPackage(uint64_t packageSize, int64_t packageSigOpsCost);
     /** Test if a set of transactions are all final */
     bool TestPackageFinality(const CTxMemPool::setEntries& package);
     /** Return true if given transaction from mapTx has already been evaluated,
diff --git a/src/net.cpp b/src/net.cpp
index dc83f19be..4cbc43e4d 100644
--- a/src/net.cpp
+++ b/src/net.cpp
@@ -2182,7 +2182,7 @@ void CNode::RecordBytesSent(uint64_t bytes)
 void CNode::SetMaxOutboundTarget(uint64_t limit)
 {
     LOCK(cs_totalBytesSent);
-    uint64_t recommendedMinimum = (nMaxOutboundTimeframe / 600) * MAX_BLOCK_SIZE;
+    uint64_t recommendedMinimum = (nMaxOutboundTimeframe / 600) * MAX_BLOCK_SERIALIZED_SIZE;
     nMaxOutboundLimit = limit;
 
     if (limit > 0 && limit < recommendedMinimum)
@@ -2237,7 +2237,7 @@ bool CNode::OutboundTargetReached(bool historicalBlockServingLimit)
     {
         // keep a large enough buffer to at least relay each block once
         uint64_t timeLeftInCycle = GetMaxOutboundTimeLeftInCycle();
-        uint64_t buffer = timeLeftInCycle / 600 * MAX_BLOCK_SIZE;
+        uint64_t buffer = timeLeftInCycle / 600 * MAX_BLOCK_SERIALIZED_SIZE;
         if (buffer >= nMaxOutboundLimit || nMaxOutboundTotalBytesSentInCycle >= nMaxOutboundLimit - buffer)
             return true;
     }
diff --git a/src/net.h b/src/net.h
index 7ed18b205..41315fc9b 100644
--- a/src/net.h
+++ b/src/net.h
@@ -45,8 +45,8 @@ static const int TIMEOUT_INTERVAL = 20 * 60;
 static const unsigned int MAX_INV_SZ = 50000;
 /** The maximum number of new addresses to accumulate before announcing. */
 static const unsigned int MAX_ADDR_TO_SEND = 1000;
-/** Maximum length of incoming protocol messages (no message over 2 MiB is currently acceptable). */
-static const unsigned int MAX_PROTOCOL_MESSAGE_LENGTH = 2 * 1024 * 1024;
+/** Maximum length of incoming protocol messages (no message over 4 MB is currently acceptable). */
+static const unsigned int MAX_PROTOCOL_MESSAGE_LENGTH = 4 * 1000 * 1000;
 /** Maximum length of strSubVer in `version` message */
 static const unsigned int MAX_SUBVERSION_LENGTH = 256;
 /** -listen default */
diff --git a/src/policy/policy.cpp b/src/policy/policy.cpp
index 67434a38f..f2148bfe1 100644
--- a/src/policy/policy.cpp
+++ b/src/policy/policy.cpp
@@ -64,8 +64,8 @@ bool IsStandardTx(const CTransaction& tx, std::string& reason)
     // almost as much to process as they cost the sender in fees, because
     // computing signature hashes is O(ninputs*txsize). Limiting transactions
     // to MAX_STANDARD_TX_SIZE mitigates CPU exhaustion attacks.
-    unsigned int sz = tx.GetSerializeSize(SER_NETWORK, CTransaction::CURRENT_VERSION);
-    if (sz >= MAX_STANDARD_TX_SIZE) {
+    unsigned int sz = GetTransactionCost(tx);
+    if (sz >= MAX_STANDARD_TX_COST) {
         reason = "tx-size";
         return false;
     }
@@ -150,3 +150,13 @@ bool AreInputsStandard(const CTransaction& tx, const CCoinsViewCache& mapInputs)
 
     return true;
 }
+
+int64_t GetVirtualTransactionSize(int64_t nCost)
+{
+    return (nCost + WITNESS_SCALE_FACTOR - 1) / WITNESS_SCALE_FACTOR;
+}
+
+int64_t GetVirtualTransactionSize(const CTransaction& tx)
+{
+    return GetVirtualTransactionSize(GetTransactionCost(tx));
+}
diff --git a/src/policy/policy.h b/src/policy/policy.h
index a6bcc777f..fefb562ff 100644
--- a/src/policy/policy.h
+++ b/src/policy/policy.h
@@ -19,12 +19,14 @@ static const unsigned int DEFAULT_BLOCK_MAX_SIZE = 750000;
 static const unsigned int DEFAULT_BLOCK_MIN_SIZE = 0;
 /** Default for -blockprioritysize, maximum space for zero/low-fee transactions **/
 static const unsigned int DEFAULT_BLOCK_PRIORITY_SIZE = 0;
+/** Default for -blockmaxcost, which control the range of block costs the mining code will create **/
+static const unsigned int DEFAULT_BLOCK_MAX_COST = 3000000;
 /** The maximum size for transactions we're willing to relay/mine */
-static const unsigned int MAX_STANDARD_TX_SIZE = 100000;
+static const unsigned int MAX_STANDARD_TX_COST = 400000;
 /** Maximum number of signature check operations in an IsStandard() P2SH script */
 static const unsigned int MAX_P2SH_SIGOPS = 15;
 /** The maximum number of sigops we're willing to relay/mine in a single tx */
-static const unsigned int MAX_STANDARD_TX_SIGOPS = MAX_BLOCK_SIGOPS/5;
+static const unsigned int MAX_STANDARD_TX_SIGOPS_COST = MAX_BLOCK_SIGOPS_COST/5;
 /** Default for -maxmempool, maximum megabytes of mempool memory usage */
 static const unsigned int DEFAULT_MAX_MEMPOOL_SIZE = 300;
 /**
@@ -65,4 +67,8 @@ bool IsStandardTx(const CTransaction& tx, std::string& reason);
      */
 bool AreInputsStandard(const CTransaction& tx, const CCoinsViewCache& mapInputs);
 
+/** Compute the virtual transaction size (cost reinterpreted as bytes). */
+int64_t GetVirtualTransactionSize(int64_t nCost);
+int64_t GetVirtualTransactionSize(const CTransaction& tx);
+
 #endif // BITCOIN_POLICY_POLICY_H
diff --git a/src/primitives/block.cpp b/src/primitives/block.cpp
index 6fb33230a..df900388f 100644
--- a/src/primitives/block.cpp
+++ b/src/primitives/block.cpp
@@ -31,3 +31,12 @@ std::string CBlock::ToString() const
     }
     return s.str();
 }
+
+int64_t GetBlockCost(const CBlock& block)
+{
+    // This implements the cost = (stripped_size * 4) + witness_size formula,
+    // using only serialization with and without witness data. As witness_size
+    // is equal to total_size - stripped_size, this formula is identical to:
+    // cost = (stripped_size * 3) + total_size.
+    return ::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) * (WITNESS_SCALE_FACTOR - 1) + ::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION);
+}
diff --git a/src/primitives/block.h b/src/primitives/block.h
index 29307aed5..e2a309e63 100644
--- a/src/primitives/block.h
+++ b/src/primitives/block.h
@@ -154,4 +154,7 @@ struct CBlockLocator
     }
 };
 
+/** Compute the consensus-critical block cost (see BIP 141). */
+int64_t GetBlockCost(const CBlock& tx);
+
 #endif // BITCOIN_PRIMITIVES_BLOCK_H
diff --git a/src/primitives/transaction.cpp b/src/primitives/transaction.cpp
index b0230530e..7f10409c0 100644
--- a/src/primitives/transaction.cpp
+++ b/src/primitives/transaction.cpp
@@ -121,7 +121,7 @@ unsigned int CTransaction::CalculateModifiedSize(unsigned int nTxSize) const
     // Providing any more cleanup incentive than making additional inputs free would
     // risk encouraging people to create junk outputs to redeem later.
     if (nTxSize == 0)
-        nTxSize = ::GetSerializeSize(*this, SER_NETWORK, PROTOCOL_VERSION);
+        nTxSize = (GetTransactionCost(*this) + WITNESS_SCALE_FACTOR - 1) / WITNESS_SCALE_FACTOR;
     for (std::vector<CTxIn>::const_iterator it(vin.begin()); it != vin.end(); ++it)
     {
         unsigned int offset = 41U + std::min(110U, (unsigned int)it->scriptSig.size());
@@ -148,3 +148,8 @@ std::string CTransaction::ToString() const
         str += "    " + vout[i].ToString() + "\n";
     return str;
 }
+
+int64_t GetTransactionCost(const CTransaction& tx)
+{
+    return ::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS) * (WITNESS_SCALE_FACTOR -1) + ::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION);
+}
diff --git a/src/primitives/transaction.h b/src/primitives/transaction.h
index 5a5824134..e87ad90f0 100644
--- a/src/primitives/transaction.h
+++ b/src/primitives/transaction.h
@@ -13,6 +13,8 @@
 
 static const int SERIALIZE_TRANSACTION_NO_WITNESS = 0x40000000;
 
+static const int WITNESS_SCALE_FACTOR = 4;
+
 /** An outpoint - a combination of a transaction hash and an index n into its vout */
 class COutPoint
 {
@@ -166,15 +168,30 @@ public:
         // which has units satoshis-per-kilobyte.
         // If you'd pay more than 1/3 in fees
         // to spend something, then we consider it dust.
-        // A typical spendable txout is 34 bytes big, and will
+        // A typical spendable non-segwit txout is 34 bytes big, and will
         // need a CTxIn of at least 148 bytes to spend:
         // so dust is a spendable txout less than
-        // 546*minRelayTxFee/1000 (in satoshis)
+        // 546*minRelayTxFee/1000 (in satoshis).
+        // A typical spendable segwit txout is 31 bytes big, and will
+        // need a CTxIn of at least 67 bytes to spend:
+        // so dust is a spendable txout less than
+        // 294*minRelayTxFee/1000 (in satoshis).
         if (scriptPubKey.IsUnspendable())
             return 0;
 
-        size_t nSize = GetSerializeSize(SER_DISK,0)+148u;
-        return 3*minRelayTxFee.GetFee(nSize);
+        size_t nSize = GetSerializeSize(SER_DISK, 0);
+        int witnessversion = 0;
+        std::vector<unsigned char> witnessprogram;
+
+        if (scriptPubKey.IsWitnessProgram(witnessversion, witnessprogram)) {
+            // sum the sizes of the parts of a transaction input
+            // with 75% segwit discount applied to the script size.
+            nSize += (32 + 4 + 1 + (107 / WITNESS_SCALE_FACTOR) + 4);
+        } else {
+            nSize += (32 + 4 + 1 + 107 + 4); // the 148 mentioned above
+        }
+
+        return 3 * minRelayTxFee.GetFee(nSize);
     }
 
     bool IsDust(const CFeeRate &minRelayTxFee) const
@@ -442,4 +459,7 @@ struct CMutableTransaction
     uint256 GetHash() const;
 };
 
+/** Compute the cost of a transaction, as defined by BIP 141 */
+int64_t GetTransactionCost(const CTransaction &tx);
+
 #endif // BITCOIN_PRIMITIVES_TRANSACTION_H
diff --git a/src/rpc/blockchain.cpp b/src/rpc/blockchain.cpp
index f11af876f..43ba4edd7 100644
--- a/src/rpc/blockchain.cpp
+++ b/src/rpc/blockchain.cpp
@@ -101,6 +101,7 @@ UniValue blockToJSON(const CBlock& block, const CBlockIndex* blockindex, bool tx
     result.push_back(Pair("confirmations", confirmations));
     result.push_back(Pair("strippedsize", (int)::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION | SERIALIZE_TRANSACTION_NO_WITNESS)));
     result.push_back(Pair("size", (int)::GetSerializeSize(block, SER_NETWORK, PROTOCOL_VERSION)));
+    result.push_back(Pair("cost", (int)::GetBlockCost(block)));
     result.push_back(Pair("height", blockindex->nHeight));
     result.push_back(Pair("version", block.nVersion));
     result.push_back(Pair("versionHex", strprintf("%08x", block.nVersion)));
@@ -560,6 +561,7 @@ UniValue getblock(const UniValue& params, bool fHelp)
             "  \"confirmations\" : n,   (numeric) The number of confirmations, or -1 if the block is not on the main chain\n"
             "  \"size\" : n,            (numeric) The block size\n"
             "  \"strippedsize\" : n,    (numeric) The block size excluding witness data\n"
+            "  \"cost\" : n             (numeric) The block cost\n"
             "  \"height\" : n,          (numeric) The block height or index\n"
             "  \"version\" : n,         (numeric) The block version\n"
             "  \"versionHex\" : \"00000000\", (string) The block version formatted in hexadecimal\n"
diff --git a/src/rpc/mining.cpp b/src/rpc/mining.cpp
index 291314b8b..4c4e59978 100644
--- a/src/rpc/mining.cpp
+++ b/src/rpc/mining.cpp
@@ -224,6 +224,7 @@ UniValue getmininginfo(const UniValue& params, bool fHelp)
             "{\n"
             "  \"blocks\": nnn,             (numeric) The current block\n"
             "  \"currentblocksize\": nnn,   (numeric) The last block size\n"
+            "  \"currentblockcost\": nnn,   (numeric) The last block cost\n"
             "  \"currentblocktx\": nnn,     (numeric) The last block transaction\n"
             "  \"difficulty\": xxx.xxxxx    (numeric) The current difficulty\n"
             "  \"errors\": \"...\"          (string) Current errors\n"
@@ -242,6 +243,7 @@ UniValue getmininginfo(const UniValue& params, bool fHelp)
     UniValue obj(UniValue::VOBJ);
     obj.push_back(Pair("blocks",           (int)chainActive.Height()));
     obj.push_back(Pair("currentblocksize", (uint64_t)nLastBlockSize));
+    obj.push_back(Pair("currentblockcost", (uint64_t)nLastBlockCost));
     obj.push_back(Pair("currentblocktx",   (uint64_t)nLastBlockTx));
     obj.push_back(Pair("difficulty",       (double)GetDifficulty()));
     obj.push_back(Pair("errors",           GetWarnings("statusbar")));
@@ -349,13 +351,14 @@ UniValue getblocktemplate(const UniValue& params, bool fHelp)
             "      {\n"
             "         \"data\" : \"xxxx\",          (string) transaction data encoded in hexadecimal (byte-for-byte)\n"
             "         \"txid\" : \"xxxx\",          (string) transaction id encoded in little-endian hexadecimal\n"
-            "         \"hash\" : \"xxxx\",          (string) hash encoded in little-endian hexadecimal\n"
+            "         \"hash\" : \"xxxx\",          (string) hash encoded in little-endian hexadecimal (including witness data)\n"
             "         \"depends\" : [              (array) array of numbers \n"
             "             n                        (numeric) transactions before this one (by 1-based index in 'transactions' list) that must be present in the final block if this one is\n"
             "             ,...\n"
             "         ],\n"
             "         \"fee\": n,                   (numeric) difference in value between transaction inputs and outputs (in Satoshis); for coinbase transactions, this is a negative Number of the total collected block fees (ie, not including the block subsidy); if key is not present, fee is unknown and clients MUST NOT assume there isn't one\n"
-            "         \"sigops\" : n,               (numeric) total number of SigOps, as counted for purposes of block limits; if key is not present, sigop count is unknown and clients MUST NOT assume there aren't any\n"
+            "         \"sigops\" : n,               (numeric) total SigOps cost, as counted for purposes of block limits; if key is not present, sigop cost is unknown and clients MUST NOT assume it is zero\n"
+            "         \"cost\" : n,                 (numeric) total transaction size cost, as counted for purposes of block limits\n"
             "         \"required\" : true|false     (boolean) if provided and true, this transaction must be in the final block\n"
             "      }\n"
             "      ,...\n"
@@ -372,8 +375,9 @@ UniValue getblocktemplate(const UniValue& params, bool fHelp)
             "     ,...\n"
             "  ],\n"
             "  \"noncerange\" : \"00000000ffffffff\",   (string) A range of valid nonces\n"
-            "  \"sigoplimit\" : n,                 (numeric) limit of sigops in blocks\n"
+            "  \"sigoplimit\" : n,                 (numeric) cost limit of sigops in blocks\n"
             "  \"sizelimit\" : n,                  (numeric) limit of block size\n"
+            "  \"costlimit\" : n,                  (numeric) limit of block cost\n"
             "  \"curtime\" : ttt,                  (numeric) current timestamp in seconds since epoch (Jan 1 1970 GMT)\n"
             "  \"bits\" : \"xxx\",                 (string) compressed target of next block\n"
             "  \"height\" : n                      (numeric) The height of the next block\n"
@@ -570,7 +574,8 @@ UniValue getblocktemplate(const UniValue& params, bool fHelp)
 
         int index_in_template = i - 1;
         entry.push_back(Pair("fee", pblocktemplate->vTxFees[index_in_template]));
-        entry.push_back(Pair("sigops", pblocktemplate->vTxSigOps[index_in_template]));
+        entry.push_back(Pair("sigops", pblocktemplate->vTxSigOpsCost[index_in_template]));
+        entry.push_back(Pair("cost", GetTransactionCost(tx)));
 
         transactions.push_back(entry);
     }
@@ -652,8 +657,9 @@ UniValue getblocktemplate(const UniValue& params, bool fHelp)
     result.push_back(Pair("mintime", (int64_t)pindexPrev->GetMedianTimePast()+1));
     result.push_back(Pair("mutable", aMutable));
     result.push_back(Pair("noncerange", "00000000ffffffff"));
-    result.push_back(Pair("sigoplimit", (int64_t)MAX_BLOCK_SIGOPS));
-    result.push_back(Pair("sizelimit", (int64_t)MAX_BLOCK_SIZE));
+    result.push_back(Pair("sigoplimit", (int64_t)MAX_BLOCK_SIGOPS_COST));
+    result.push_back(Pair("sizelimit", (int64_t)MAX_BLOCK_SERIALIZED_SIZE));
+    result.push_back(Pair("costlimit", (int64_t)MAX_BLOCK_COST));
     result.push_back(Pair("curtime", pblock->GetBlockTime()));
     result.push_back(Pair("bits", strprintf("%08x", pblock->nBits)));
     result.push_back(Pair("height", (int64_t)(pindexPrev->nHeight+1)));
diff --git a/src/rpc/rawtransaction.cpp b/src/rpc/rawtransaction.cpp
index 12e3eaa92..b36179943 100644
--- a/src/rpc/rawtransaction.cpp
+++ b/src/rpc/rawtransaction.cpp
@@ -64,6 +64,7 @@ void TxToJSON(const CTransaction& tx, const uint256 hashBlock, UniValue& entry)
     entry.push_back(Pair("txid", tx.GetHash().GetHex()));
     entry.push_back(Pair("hash", tx.GetWitnessHash().GetHex()));
     entry.push_back(Pair("size", (int)::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION)));
+    entry.push_back(Pair("vsize", (int)::GetVirtualTransactionSize(tx)));
     entry.push_back(Pair("version", tx.nVersion));
     entry.push_back(Pair("locktime", (int64_t)tx.nLockTime));
 
@@ -150,6 +151,7 @@ UniValue getrawtransaction(const UniValue& params, bool fHelp)
             "  \"txid\" : \"id\",        (string) The transaction id (same as provided)\n"
             "  \"hash\" : \"id\",        (string) The transaction hash (differs from txid for witness transactions)\n"
             "  \"size\" : n,             (numeric) The serialized transaction size\n"
+            "  \"vsize\" : n,            (numeric) The virtual transaction size (differs from size for witness transactions)\n"
             "  \"version\" : n,          (numeric) The version\n"
             "  \"locktime\" : ttt,       (numeric) The lock time\n"
             "  \"vin\" : [               (array of json objects)\n"
@@ -461,6 +463,7 @@ UniValue decoderawtransaction(const UniValue& params, bool fHelp)
             "  \"txid\" : \"id\",        (string) The transaction id\n"
             "  \"hash\" : \"id\",        (string) The transaction hash (differs from txid for witness transactions)\n"
             "  \"size\" : n,             (numeric) The transaction size\n"
+            "  \"vsize\" : n,            (numeric) The virtual transaction size (differs from size for witness transactions)\n"
             "  \"version\" : n,          (numeric) The version\n"
             "  \"locktime\" : ttt,       (numeric) The lock time\n"
             "  \"vin\" : [               (array of json objects)\n"
diff --git a/src/script/interpreter.cpp b/src/script/interpreter.cpp
index 4deebd050..bc027e9f0 100644
--- a/src/script/interpreter.cpp
+++ b/src/script/interpreter.cpp
@@ -1470,3 +1470,50 @@ bool VerifyScript(const CScript& scriptSig, const CScript& scriptPubKey, const C
 
     return set_success(serror);
 }
+
+size_t static WitnessSigOps(int witversion, const std::vector<unsigned char>& witprogram, const CScriptWitness& witness, int flags)
+{
+    if (witversion == 0) {
+        if (witprogram.size() == 20)
+            return 1;
+
+        if (witprogram.size() == 32 && witness.stack.size() > 0) {
+            CScript subscript(witness.stack.back().begin(), witness.stack.back().end());
+            return subscript.GetSigOpCount(true);
+        }
+    }
+
+    // Future flags may be implemented here.
+    return 0;
+}
+
+size_t CountWitnessSigOps(const CScript& scriptSig, const CScript& scriptPubKey, const CScriptWitness* witness, unsigned int flags)
+{
+    static const CScriptWitness witnessEmpty;
+
+    if ((flags & SCRIPT_VERIFY_WITNESS) == 0) {
+        return 0;
+    }
+    assert((flags & SCRIPT_VERIFY_P2SH) != 0);
+
+    int witnessversion;
+    std::vector<unsigned char> witnessprogram;
+    if (scriptPubKey.IsWitnessProgram(witnessversion, witnessprogram)) {
+        return WitnessSigOps(witnessversion, witnessprogram, witness ? *witness : witnessEmpty, flags);
+    }
+
+    if (scriptPubKey.IsPayToScriptHash() && scriptSig.IsPushOnly()) {
+        CScript::const_iterator pc = scriptSig.begin();
+        vector<unsigned char> data;
+        while (pc < scriptSig.end()) {
+            opcodetype opcode;
+            scriptSig.GetOp(pc, opcode, data);
+        }
+        CScript subscript(data.begin(), data.end());
+        if (subscript.IsWitnessProgram(witnessversion, witnessprogram)) {
+            return WitnessSigOps(witnessversion, witnessprogram, witness ? *witness : witnessEmpty, flags);
+        }
+    }
+
+    return 0;
+}
diff --git a/src/script/interpreter.h b/src/script/interpreter.h
index 864372942..bd2f21166 100644
--- a/src/script/interpreter.h
+++ b/src/script/interpreter.h
@@ -156,4 +156,6 @@ public:
 bool EvalScript(std::vector<std::vector<unsigned char> >& stack, const CScript& script, unsigned int flags, const BaseSignatureChecker& checker, SigVersion sigversion, ScriptError* error = NULL);
 bool VerifyScript(const CScript& scriptSig, const CScript& scriptPubKey, const CScriptWitness* witness, unsigned int flags, const BaseSignatureChecker& checker, ScriptError* serror = NULL);
 
+size_t CountWitnessSigOps(const CScript& scriptSig, const CScript& scriptPubKey, const CScriptWitness* witness, unsigned int flags);
+
 #endif // BITCOIN_SCRIPT_INTERPRETER_H
diff --git a/src/test/mempool_tests.cpp b/src/test/mempool_tests.cpp
index c8b43df26..033a50f94 100644
--- a/src/test/mempool_tests.cpp
+++ b/src/test/mempool_tests.cpp
@@ -2,6 +2,7 @@
 // Distributed under the MIT software license, see the accompanying
 // file COPYING or http://www.opensource.org/licenses/mit-license.php.
 
+#include "policy/policy.h"
 #include "txmempool.h"
 #include "util.h"
 
@@ -336,7 +337,7 @@ BOOST_AUTO_TEST_CASE(MempoolAncestorIndexingTest)
     tx2.vout[0].scriptPubKey = CScript() << OP_11 << OP_EQUAL;
     tx2.vout[0].nValue = 2 * COIN;
     pool.addUnchecked(tx2.GetHash(), entry.Fee(20000LL).Priority(9.0).FromTx(tx2));
-    uint64_t tx2Size = ::GetSerializeSize(tx2, SER_NETWORK, PROTOCOL_VERSION);
+    uint64_t tx2Size = GetVirtualTransactionSize(tx2);
 
     /* lowest fee */
     CMutableTransaction tx3 = CMutableTransaction();
@@ -384,7 +385,7 @@ BOOST_AUTO_TEST_CASE(MempoolAncestorIndexingTest)
     tx6.vout.resize(1);
     tx6.vout[0].scriptPubKey = CScript() << OP_11 << OP_EQUAL;
     tx6.vout[0].nValue = 20 * COIN;
-    uint64_t tx6Size = ::GetSerializeSize(tx6, SER_NETWORK, PROTOCOL_VERSION);
+    uint64_t tx6Size = GetVirtualTransactionSize(tx6);
 
     pool.addUnchecked(tx6.GetHash(), entry.Fee(0LL).FromTx(tx6));
     BOOST_CHECK_EQUAL(pool.size(), 6);
@@ -398,7 +399,7 @@ BOOST_AUTO_TEST_CASE(MempoolAncestorIndexingTest)
     tx7.vout.resize(1);
     tx7.vout[0].scriptPubKey = CScript() << OP_11 << OP_EQUAL;
     tx7.vout[0].nValue = 10 * COIN;
-    uint64_t tx7Size = ::GetSerializeSize(tx7, SER_NETWORK, PROTOCOL_VERSION);
+    uint64_t tx7Size = GetVirtualTransactionSize(tx7);
 
     /* set the fee to just below tx2's feerate when including ancestor */
     CAmount fee = (20000/tx2Size)*(tx7Size + tx6Size) - 1;
@@ -467,12 +468,12 @@ BOOST_AUTO_TEST_CASE(MempoolSizeLimitTest)
     BOOST_CHECK(pool.exists(tx2.GetHash()));
     BOOST_CHECK(pool.exists(tx3.GetHash()));
 
-    pool.TrimToSize(::GetSerializeSize(CTransaction(tx1), SER_NETWORK, PROTOCOL_VERSION)); // mempool is limited to tx1's size in memory usage, so nothing fits
+    pool.TrimToSize(GetVirtualTransactionSize(tx1)); // mempool is limited to tx1's size in memory usage, so nothing fits
     BOOST_CHECK(!pool.exists(tx1.GetHash()));
     BOOST_CHECK(!pool.exists(tx2.GetHash()));
     BOOST_CHECK(!pool.exists(tx3.GetHash()));
 
-    CFeeRate maxFeeRateRemoved(25000, ::GetSerializeSize(CTransaction(tx3), SER_NETWORK, PROTOCOL_VERSION) + ::GetSerializeSize(CTransaction(tx2), SER_NETWORK, PROTOCOL_VERSION));
+    CFeeRate maxFeeRateRemoved(25000, GetVirtualTransactionSize(tx3) + GetVirtualTransactionSize(tx2));
     BOOST_CHECK_EQUAL(pool.GetMinFee(1).GetFeePerK(), maxFeeRateRemoved.GetFeePerK() + 1000);
 
     CMutableTransaction tx4 = CMutableTransaction();
diff --git a/src/test/miner_tests.cpp b/src/test/miner_tests.cpp
index ca8d6d2e0..fd581db52 100644
--- a/src/test/miner_tests.cpp
+++ b/src/test/miner_tests.cpp
@@ -181,6 +181,9 @@ void TestPackageSelection(const CChainParams& chainparams, CScript scriptPubKey,
 // NOTE: These tests rely on CreateNewBlock doing its own self-validation!
 BOOST_AUTO_TEST_CASE(CreateNewBlock_validity)
 {
+    // Disable size accounting (CPFP does not support it)
+    mapArgs["-blockmaxsize"] = strprintf("%u", MAX_BLOCK_SERIALIZED_SIZE);
+
     const CChainParams& chainparams = Params(CBaseChainParams::MAIN);
     CScript scriptPubKey = CScript() << ParseHex("04678afdb0fe5548271967f1a67130b7105cd6a828e03909a67962e0ea1f61deb649f6bc3f4cef38c4f35504e51ec112de5c384df7ba0b8d578a4c702b6bf11d5f") << OP_CHECKSIG;
     CBlockTemplate *pblocktemplate;
@@ -264,7 +267,7 @@ BOOST_AUTO_TEST_CASE(CreateNewBlock_validity)
         hash = tx.GetHash();
         bool spendsCoinbase = (i == 0) ? true : false; // only first tx spends coinbase
         // If we do set the # of sig ops in the CTxMemPoolEntry, template creation passes
-        mempool.addUnchecked(hash, entry.Fee(LOWFEE).Time(GetTime()).SpendsCoinbase(spendsCoinbase).SigOps(20).FromTx(tx));
+        mempool.addUnchecked(hash, entry.Fee(LOWFEE).Time(GetTime()).SpendsCoinbase(spendsCoinbase).SigOpsCost(80).FromTx(tx));
         tx.vin[0].prevout.hash = hash;
     }
     BOOST_CHECK(pblocktemplate = BlockAssembler(chainparams).CreateNewBlock(scriptPubKey));
diff --git a/src/test/policyestimator_tests.cpp b/src/test/policyestimator_tests.cpp
index 2b00e6f56..5c902387f 100644
--- a/src/test/policyestimator_tests.cpp
+++ b/src/test/policyestimator_tests.cpp
@@ -2,6 +2,7 @@
 // Distributed under the MIT software license, see the accompanying
 // file COPYING or http://www.opensource.org/licenses/mit-license.php.
 
+#include "policy/policy.h"
 #include "policy/fees.h"
 #include "txmempool.h"
 #include "uint256.h"
@@ -50,7 +51,7 @@ BOOST_AUTO_TEST_CASE(BlockPolicyEstimates)
     tx.vin[0].scriptSig = garbage;
     tx.vout.resize(1);
     tx.vout[0].nValue=0LL;
-    CFeeRate baseRate(basefee, ::GetSerializeSize(tx, SER_NETWORK, PROTOCOL_VERSION));
+    CFeeRate baseRate(basefee, GetVirtualTransactionSize(tx));
 
     // Create a fake block
     std::vector<CTransaction> block;
diff --git a/src/test/test_bitcoin.cpp b/src/test/test_bitcoin.cpp
index 1f3b19880..856f9b842 100644
--- a/src/test/test_bitcoin.cpp
+++ b/src/test/test_bitcoin.cpp
@@ -136,7 +136,7 @@ CTxMemPoolEntry TestMemPoolEntryHelper::FromTx(CTransaction &txn, CTxMemPool *po
     CAmount inChainValue = hasNoDependencies ? txn.GetValueOut() : 0;
 
     return CTxMemPoolEntry(txn, nFee, nTime, dPriority, nHeight,
-                           hasNoDependencies, inChainValue, spendsCoinbase, sigOpCount, lp);
+                           hasNoDependencies, inChainValue, spendsCoinbase, sigOpCost, lp);
 }
 
 void Shutdown(void* parg)
diff --git a/src/test/test_bitcoin.h b/src/test/test_bitcoin.h
index 78b87e710..bc0d2fe31 100644
--- a/src/test/test_bitcoin.h
+++ b/src/test/test_bitcoin.h
@@ -70,12 +70,12 @@ struct TestMemPoolEntryHelper
     unsigned int nHeight;
     bool hadNoDependencies;
     bool spendsCoinbase;
-    unsigned int sigOpCount;
+    unsigned int sigOpCost;
     LockPoints lp;
 
     TestMemPoolEntryHelper() :
         nFee(0), nTime(0), dPriority(0.0), nHeight(1),
-        hadNoDependencies(false), spendsCoinbase(false), sigOpCount(1) { }
+        hadNoDependencies(false), spendsCoinbase(false), sigOpCost(4) { }
     
     CTxMemPoolEntry FromTx(CMutableTransaction &tx, CTxMemPool *pool = NULL);
     CTxMemPoolEntry FromTx(CTransaction &tx, CTxMemPool *pool = NULL);
@@ -87,6 +87,6 @@ struct TestMemPoolEntryHelper
     TestMemPoolEntryHelper &Height(unsigned int _height) { nHeight = _height; return *this; }
     TestMemPoolEntryHelper &HadNoDependencies(bool _hnd) { hadNoDependencies = _hnd; return *this; }
     TestMemPoolEntryHelper &SpendsCoinbase(bool _flag) { spendsCoinbase = _flag; return *this; }
-    TestMemPoolEntryHelper &SigOps(unsigned int _sigops) { sigOpCount = _sigops; return *this; }
+    TestMemPoolEntryHelper &SigOpsCost(unsigned int _sigopsCost) { sigOpCost = _sigopsCost; return *this; }
 };
 #endif
diff --git a/src/txmempool.cpp b/src/txmempool.cpp
index ead28546d..a48a6d946 100644
--- a/src/txmempool.cpp
+++ b/src/txmempool.cpp
@@ -9,6 +9,7 @@
 #include "consensus/consensus.h"
 #include "consensus/validation.h"
 #include "main.h"
+#include "policy/policy.h"
 #include "policy/fees.h"
 #include "streams.h"
 #include "timedata.h"
@@ -22,17 +23,17 @@ using namespace std;
 CTxMemPoolEntry::CTxMemPoolEntry(const CTransaction& _tx, const CAmount& _nFee,
                                  int64_t _nTime, double _entryPriority, unsigned int _entryHeight,
                                  bool poolHasNoInputsOf, CAmount _inChainInputValue,
-                                 bool _spendsCoinbase, unsigned int _sigOps, LockPoints lp):
+                                 bool _spendsCoinbase, int64_t _sigOpsCost, LockPoints lp):
     tx(std::make_shared<CTransaction>(_tx)), nFee(_nFee), nTime(_nTime), entryPriority(_entryPriority), entryHeight(_entryHeight),
     hadNoDependencies(poolHasNoInputsOf), inChainInputValue(_inChainInputValue),
-    spendsCoinbase(_spendsCoinbase), sigOpCount(_sigOps), lockPoints(lp)
+    spendsCoinbase(_spendsCoinbase), sigOpCost(_sigOpsCost), lockPoints(lp)
 {
-    nTxSize = ::GetSerializeSize(_tx, SER_NETWORK, PROTOCOL_VERSION);
-    nModSize = _tx.CalculateModifiedSize(nTxSize);
+    nTxCost = GetTransactionCost(_tx);
+    nModSize = _tx.CalculateModifiedSize(GetTxSize());
     nUsageSize = RecursiveDynamicUsage(*tx) + memusage::DynamicUsage(tx);
 
     nCountWithDescendants = 1;
-    nSizeWithDescendants = nTxSize;
+    nSizeWithDescendants = GetTxSize();
     nModFeesWithDescendants = nFee;
     CAmount nValueIn = _tx.GetValueOut()+nFee;
     assert(inChainInputValue <= nValueIn);
@@ -40,9 +41,9 @@ CTxMemPoolEntry::CTxMemPoolEntry(const CTransaction& _tx, const CAmount& _nFee,
     feeDelta = 0;
 
     nCountWithAncestors = 1;
-    nSizeWithAncestors = nTxSize;
+    nSizeWithAncestors = GetTxSize();
     nModFeesWithAncestors = nFee;
-    nSigOpCountWithAncestors = sigOpCount;
+    nSigOpCostWithAncestors = sigOpCost;
 }
 
 CTxMemPoolEntry::CTxMemPoolEntry(const CTxMemPoolEntry& other)
@@ -72,6 +73,11 @@ void CTxMemPoolEntry::UpdateLockPoints(const LockPoints& lp)
     lockPoints = lp;
 }
 
+size_t CTxMemPoolEntry::GetTxSize() const
+{
+    return GetVirtualTransactionSize(nTxCost);
+}
+
 // Update the given tx for any in-mempool descendants.
 // Assumes that setMemPoolChildren is correct for the given tx and all
 // descendants.
@@ -111,7 +117,7 @@ void CTxMemPool::UpdateForDescendants(txiter updateIt, cacheMap &cachedDescendan
             modifyCount++;
             cachedDescendants[updateIt].insert(cit);
             // Update ancestor state for each descendant
-            mapTx.modify(cit, update_ancestor_state(updateIt->GetTxSize(), updateIt->GetModifiedFee(), 1, updateIt->GetSigOpCount()));
+            mapTx.modify(cit, update_ancestor_state(updateIt->GetTxSize(), updateIt->GetModifiedFee(), 1, updateIt->GetSigOpCost()));
         }
     }
     mapTx.modify(updateIt, update_descendant_state(modifySize, modifyFee, modifyCount));
@@ -247,13 +253,13 @@ void CTxMemPool::UpdateEntryForAncestors(txiter it, const setEntries &setAncesto
     int64_t updateCount = setAncestors.size();
     int64_t updateSize = 0;
     CAmount updateFee = 0;
-    int updateSigOps = 0;
+    int64_t updateSigOpsCost = 0;
     BOOST_FOREACH(txiter ancestorIt, setAncestors) {
         updateSize += ancestorIt->GetTxSize();
         updateFee += ancestorIt->GetModifiedFee();
-        updateSigOps += ancestorIt->GetSigOpCount();
+        updateSigOpsCost += ancestorIt->GetSigOpCost();
     }
-    mapTx.modify(it, update_ancestor_state(updateSize, updateFee, updateCount, updateSigOps));
+    mapTx.modify(it, update_ancestor_state(updateSize, updateFee, updateCount, updateSigOpsCost));
 }
 
 void CTxMemPool::UpdateChildrenForRemoval(txiter it)
@@ -282,7 +288,7 @@ void CTxMemPool::UpdateForRemoveFromMempool(const setEntries &entriesToRemove, b
             setDescendants.erase(removeIt); // don't update state for self
             int64_t modifySize = -((int64_t)removeIt->GetTxSize());
             CAmount modifyFee = -removeIt->GetModifiedFee();
-            int modifySigOps = -removeIt->GetSigOpCount();
+            int modifySigOps = -removeIt->GetSigOpCost();
             BOOST_FOREACH(txiter dit, setDescendants) {
                 mapTx.modify(dit, update_ancestor_state(modifySize, modifyFee, -1, modifySigOps));
             }
@@ -338,8 +344,8 @@ void CTxMemPoolEntry::UpdateAncestorState(int64_t modifySize, CAmount modifyFee,
     nModFeesWithAncestors += modifyFee;
     nCountWithAncestors += modifyCount;
     assert(int64_t(nCountWithAncestors) > 0);
-    nSigOpCountWithAncestors += modifySigOps;
-    assert(int(nSigOpCountWithAncestors) >= 0);
+    nSigOpCostWithAncestors += modifySigOps;
+    assert(int(nSigOpCostWithAncestors) >= 0);
 }
 
 CTxMemPool::CTxMemPool(const CFeeRate& _minReasonableRelayFee) :
@@ -666,7 +672,7 @@ void CTxMemPool::check(const CCoinsViewCache *pcoins) const
         bool fDependsWait = false;
         setEntries setParentCheck;
         int64_t parentSizes = 0;
-        unsigned int parentSigOpCount = 0;
+        int64_t parentSigOpCost = 0;
         BOOST_FOREACH(const CTxIn &txin, tx.vin) {
             // Check that every mempool transaction's inputs refer to available coins, or other mempool tx's.
             indexed_transaction_set::const_iterator it2 = mapTx.find(txin.prevout.hash);
@@ -676,7 +682,7 @@ void CTxMemPool::check(const CCoinsViewCache *pcoins) const
                 fDependsWait = true;
                 if (setParentCheck.insert(it2).second) {
                     parentSizes += it2->GetTxSize();
-                    parentSigOpCount += it2->GetSigOpCount();
+                    parentSigOpCost += it2->GetSigOpCost();
                 }
             } else {
                 const CCoins* coins = pcoins->AccessCoins(txin.prevout.hash);
@@ -698,17 +704,17 @@ void CTxMemPool::check(const CCoinsViewCache *pcoins) const
         uint64_t nCountCheck = setAncestors.size() + 1;
         uint64_t nSizeCheck = it->GetTxSize();
         CAmount nFeesCheck = it->GetModifiedFee();
-        unsigned int nSigOpCheck = it->GetSigOpCount();
+        int64_t nSigOpCheck = it->GetSigOpCost();
 
         BOOST_FOREACH(txiter ancestorIt, setAncestors) {
             nSizeCheck += ancestorIt->GetTxSize();
             nFeesCheck += ancestorIt->GetModifiedFee();
-            nSigOpCheck += ancestorIt->GetSigOpCount();
+            nSigOpCheck += ancestorIt->GetSigOpCost();
         }
 
         assert(it->GetCountWithAncestors() == nCountCheck);
         assert(it->GetSizeWithAncestors() == nSizeCheck);
-        assert(it->GetSigOpCountWithAncestors() == nSigOpCheck);
+        assert(it->GetSigOpCostWithAncestors() == nSigOpCheck);
         assert(it->GetModFeesWithAncestors() == nFeesCheck);
 
         // Check children against mapNextTx
diff --git a/src/txmempool.h b/src/txmempool.h
index d6d0d72ff..e5a500e19 100644
--- a/src/txmempool.h
+++ b/src/txmempool.h
@@ -78,7 +78,7 @@ class CTxMemPoolEntry
 private:
     std::shared_ptr<const CTransaction> tx;
     CAmount nFee;              //!< Cached to avoid expensive parent-transaction lookups
-    size_t nTxSize;            //!< ... and avoid recomputing tx size
+    size_t nTxCost;            //!< ... and avoid recomputing tx cost (also used for GetTxSize())
     size_t nModSize;           //!< ... and modified size for priority
     size_t nUsageSize;         //!< ... and total memory usage
     int64_t nTime;             //!< Local time when entering the mempool
@@ -87,7 +87,7 @@ private:
     bool hadNoDependencies;    //!< Not dependent on any other txs when it entered the mempool
     CAmount inChainInputValue; //!< Sum of all txin values that are already in blockchain
     bool spendsCoinbase;       //!< keep track of transactions that spend a coinbase
-    unsigned int sigOpCount;   //!< Legacy sig ops plus P2SH sig op count
+    int64_t sigOpCost;         //!< Total sigop cost
     int64_t feeDelta;          //!< Used for determining the priority of the transaction for mining in a block
     LockPoints lockPoints;     //!< Track the height and time at which tx was final
 
@@ -104,13 +104,13 @@ private:
     uint64_t nCountWithAncestors;
     uint64_t nSizeWithAncestors;
     CAmount nModFeesWithAncestors;
-    unsigned int nSigOpCountWithAncestors;
+    int64_t nSigOpCostWithAncestors;
 
 public:
     CTxMemPoolEntry(const CTransaction& _tx, const CAmount& _nFee,
                     int64_t _nTime, double _entryPriority, unsigned int _entryHeight,
                     bool poolHasNoInputsOf, CAmount _inChainInputValue, bool spendsCoinbase,
-                    unsigned int nSigOps, LockPoints lp);
+                    int64_t nSigOpsCost, LockPoints lp);
     CTxMemPoolEntry(const CTxMemPoolEntry& other);
 
     const CTransaction& GetTx() const { return *this->tx; }
@@ -121,11 +121,12 @@ public:
      */
     double GetPriority(unsigned int currentHeight) const;
     const CAmount& GetFee() const { return nFee; }
-    size_t GetTxSize() const { return nTxSize; }
+    size_t GetTxSize() const;
+    size_t GetTxCost() const { return nTxCost; }
     int64_t GetTime() const { return nTime; }
     unsigned int GetHeight() const { return entryHeight; }
     bool WasClearAtEntry() const { return hadNoDependencies; }
-    unsigned int GetSigOpCount() const { return sigOpCount; }
+    int64_t GetSigOpCost() const { return sigOpCost; }
     int64_t GetModifiedFee() const { return nFee + feeDelta; }
     size_t DynamicMemoryUsage() const { return nUsageSize; }
     const LockPoints& GetLockPoints() const { return lockPoints; }
@@ -149,7 +150,7 @@ public:
     uint64_t GetCountWithAncestors() const { return nCountWithAncestors; }
     uint64_t GetSizeWithAncestors() const { return nSizeWithAncestors; }
     CAmount GetModFeesWithAncestors() const { return nModFeesWithAncestors; }
-    unsigned int GetSigOpCountWithAncestors() const { return nSigOpCountWithAncestors; }
+    int64_t GetSigOpCostWithAncestors() const { return nSigOpCostWithAncestors; }
 
     mutable size_t vTxHashesIdx; //!< Index in mempool's vTxHashes
 };
@@ -172,18 +173,18 @@ struct update_descendant_state
 
 struct update_ancestor_state
 {
-    update_ancestor_state(int64_t _modifySize, CAmount _modifyFee, int64_t _modifyCount, int _modifySigOps) :
-        modifySize(_modifySize), modifyFee(_modifyFee), modifyCount(_modifyCount), modifySigOps(_modifySigOps)
+    update_ancestor_state(int64_t _modifySize, CAmount _modifyFee, int64_t _modifyCount, int64_t _modifySigOpsCost) :
+        modifySize(_modifySize), modifyFee(_modifyFee), modifyCount(_modifyCount), modifySigOpsCost(_modifySigOpsCost)
     {}
 
     void operator() (CTxMemPoolEntry &e)
-        { e.UpdateAncestorState(modifySize, modifyFee, modifyCount, modifySigOps); }
+        { e.UpdateAncestorState(modifySize, modifyFee, modifyCount, modifySigOpsCost); }
 
     private:
         int64_t modifySize;
         CAmount modifyFee;
         int64_t modifyCount;
-        int modifySigOps;
+        int64_t modifySigOpsCost;
 };
 
 struct update_fee_delta
diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 723b2ecef..babde1a02 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -2348,7 +2348,7 @@ bool CWallet::CreateTransaction(const vector<CRecipient>& vecSend, CWalletTx& wt
                     nIn++;
                 }
 
-                unsigned int nBytes = ::GetSerializeSize(txNew, SER_NETWORK, PROTOCOL_VERSION);
+                unsigned int nBytes = GetVirtualTransactionSize(txNew);
 
                 // Remove scriptSigs if we used dummy signatures for fee calculation
                 if (!sign) {
@@ -2360,7 +2360,7 @@ bool CWallet::CreateTransaction(const vector<CRecipient>& vecSend, CWalletTx& wt
                 *static_cast<CTransaction*>(&wtxNew) = CTransaction(txNew);
 
                 // Limit size
-                if (nBytes >= MAX_STANDARD_TX_SIZE)
+                if (GetTransactionCost(txNew) >= MAX_STANDARD_TX_COST)
                 {
                     strFailReason = _("Transaction too large");
                     return false;