diff --git a/src/main.cpp b/src/main.cpp
index 846802713..7dd59fdea 100644
--- a/src/main.cpp
+++ b/src/main.cpp
@@ -1826,6 +1826,28 @@ bool CBlock::AcceptBlock()
     if (!Checkpoints::CheckBlock(nHeight, hash))
         return DoS(100, error("AcceptBlock() : rejected by checkpoint lock-in at %d", nHeight));
 
+    // Reject block.nVersion=1 blocks when 95% (75% on testnet) of the network has upgraded:
+    if (nVersion < 2)
+    {
+        if ((!fTestNet && CBlockIndex::IsSuperMajority(2, pindexPrev, 950, 1000)) ||
+            (fTestNet && CBlockIndex::IsSuperMajority(2, pindexPrev, 75, 100)))
+        {
+            return error("AcceptBlock() : rejected nVersion=1 block");
+        }
+    }
+    // Enforce block.nVersion=2 rule that the coinbase starts with serialized block height
+    if (nVersion >= 2)
+    {
+        // if 750 of the last 1,000 blocks are version 2 or greater (51/100 if testnet):
+        if ((!fTestNet && CBlockIndex::IsSuperMajority(2, pindexPrev, 750, 1000)) ||
+            (fTestNet && CBlockIndex::IsSuperMajority(2, pindexPrev, 51, 100)))
+        {
+            CScript expect = CScript() << nHeight;
+            if (!std::equal(expect.begin(), expect.end(), vtx[0].vin[0].scriptSig.begin()))
+                return DoS(100, error("AcceptBlock() : block height mismatch in coinbase"));
+        }
+    }
+
     // Write block to history file
     if (!CheckDiskSpace(::GetSerializeSize(*this, SER_DISK, CLIENT_VERSION)))
         return error("AcceptBlock() : out of disk space");
@@ -1849,6 +1871,18 @@ bool CBlock::AcceptBlock()
     return true;
 }
 
+bool CBlockIndex::IsSuperMajority(int minVersion, const CBlockIndex* pstart, unsigned int nRequired, unsigned int nToCheck)
+{
+    unsigned int nFound = 0;
+    for (unsigned int i = 0; i < nToCheck && nFound < nRequired && pstart != NULL; i++)
+    {
+        if (pstart->nVersion >= minVersion)
+            ++nFound;
+        pstart = pstart->pprev;
+    }
+    return (nFound >= nRequired);
+}
+
 bool ProcessBlock(CNode* pfrom, CBlock* pblock)
 {
     // Check for duplicate
@@ -3663,7 +3697,8 @@ void IncrementExtraNonce(CBlock* pblock, CBlockIndex* pindexPrev, unsigned int&
         hashPrevBlock = pblock->hashPrevBlock;
     }
     ++nExtraNonce;
-    pblock->vtx[0].vin[0].scriptSig = (CScript() << pblock->nTime << CBigNum(nExtraNonce)) + COINBASE_FLAGS;
+    unsigned int nHeight = pindexPrev->nHeight+1; // Height first in coinbase required for block.version=2
+    pblock->vtx[0].vin[0].scriptSig = (CScript() << nHeight << CBigNum(nExtraNonce)) + COINBASE_FLAGS;
     assert(pblock->vtx[0].vin[0].scriptSig.size() <= 100);
 
     pblock->hashMerkleRoot = pblock->BuildMerkleTree();
diff --git a/src/main.h b/src/main.h
index e88b83d46..cbc48e05c 100644
--- a/src/main.h
+++ b/src/main.h
@@ -820,7 +820,7 @@ class CBlock
 {
 public:
     // header
-    static const int CURRENT_VERSION=1;
+    static const int CURRENT_VERSION=2;
     int nVersion;
     uint256 hashPrevBlock;
     uint256 hashMerkleRoot;
@@ -1164,6 +1164,12 @@ public:
         return pindex->GetMedianTimePast();
     }
 
+    /**
+     * Returns true if there are nRequired or more blocks of minVersion or above
+     * in the last nToCheck blocks, starting at pstart and going backwards.
+     */
+    static bool IsSuperMajority(int minVersion, const CBlockIndex* pstart,
+                                unsigned int nRequired, unsigned int nToCheck);
 
 
     std::string ToString() const
diff --git a/src/test/miner_tests.cpp b/src/test/miner_tests.cpp
index 3c6039541..4558a76a2 100644
--- a/src/test/miner_tests.cpp
+++ b/src/test/miner_tests.cpp
@@ -62,6 +62,7 @@ BOOST_AUTO_TEST_CASE(CreateNewBlock_validity)
     std::vector<CTransaction*>txFirst;
     for (unsigned int i = 0; i < sizeof(blockinfo)/sizeof(*blockinfo); ++i)
     {
+        pblock->nVersion = 1;
         pblock->nTime = pindexBest->GetMedianTimePast()+1;
         pblock->vtx[0].vin[0].scriptSig = CScript();
         pblock->vtx[0].vin[0].scriptSig.push_back(blockinfo[i].extranonce);