diff --git a/Cargo.lock b/Cargo.lock
index 967f31e2..f20b2b1c 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -126,7 +126,7 @@ dependencies = [
  "bn 0.4.4 (git+https://github.com/paritytech/bn)",
  "pairing 0.14.2 (registry+https://github.com/rust-lang/crates.io-index)",
  "primitives 0.1.0",
- "rust-crypto 0.2.36 (registry+https://github.com/rust-lang/crates.io-index)",
+ "rust-crypto 0.2.36 (git+https://github.com/nikvolf/rust-crypto?branch=no-pad)",
  "rustc-hex 2.0.0 (registry+https://github.com/rust-lang/crates.io-index)",
  "sapling-crypto 0.0.1 (git+https://github.com/zcash-hackworks/sapling-crypto.git?rev=21084bde2019c04bd34208e63c3560fe2c02fb0e)",
  "serde 1.0.21 (registry+https://github.com/rust-lang/crates.io-index)",
@@ -1153,7 +1153,7 @@ dependencies = [
 [[package]]
 name = "rust-crypto"
 version = "0.2.36"
-source = "registry+https://github.com/rust-lang/crates.io-index"
+source = "git+https://github.com/nikvolf/rust-crypto?branch=no-pad#4acc67cb46bb4e1b5b30d9c787a9eab5c8ac9a34"
 dependencies = [
  "gcc 0.3.54 (registry+https://github.com/rust-lang/crates.io-index)",
  "libc 0.2.33 (registry+https://github.com/rust-lang/crates.io-index)",
@@ -1790,7 +1790,7 @@ source = "registry+https://github.com/rust-lang/crates.io-index"
 "checksum relay 0.1.0 (registry+https://github.com/rust-lang/crates.io-index)" = "f301bafeb60867c85170031bdb2fcf24c8041f33aee09e7b116a58d4e9f781c5"
 "checksum rocksdb 0.4.5 (git+https://github.com/ethcore/rust-rocksdb)" = "<none>"
 "checksum rocksdb-sys 0.3.0 (git+https://github.com/ethcore/rust-rocksdb)" = "<none>"
-"checksum rust-crypto 0.2.36 (registry+https://github.com/rust-lang/crates.io-index)" = "f76d05d3993fd5f4af9434e8e436db163a12a9d40e1a58a726f27a01dfd12a2a"
+"checksum rust-crypto 0.2.36 (git+https://github.com/nikvolf/rust-crypto?branch=no-pad)" = "<none>"
 "checksum rustc-hex 2.0.0 (registry+https://github.com/rust-lang/crates.io-index)" = "d2b03280c2813907a030785570c577fb27d3deec8da4c18566751ade94de0ace"
 "checksum rustc-serialize 0.3.24 (registry+https://github.com/rust-lang/crates.io-index)" = "dcf128d1287d2ea9d80910b5f1120d0b8eede3fbf1abe91c40d39ea7d51e6fda"
 "checksum rustc_version 0.2.1 (registry+https://github.com/rust-lang/crates.io-index)" = "b9743a7670d88d5d52950408ecdb7c71d8986251ab604d4689dd2ca25c9bca69"
diff --git a/crypto/Cargo.toml b/crypto/Cargo.toml
index a74cda80..44f7b418 100644
--- a/crypto/Cargo.toml
+++ b/crypto/Cargo.toml
@@ -7,7 +7,7 @@ authors = ["debris <marek.kotewicz@gmail.com>"]
 bellman = "0.1"
 blake2-rfc = { git = "https://github.com/gtank/blake2-rfc.git", rev = "7a5b5fc99ae483a0043db7547fb79a6fa44b88a9" }
 pairing = "0.14.2"
-rust-crypto = "0.2.36"
+rust-crypto = { git = "https://github.com/nikvolf/rust-crypto", branch = "no-pad" }
 sapling-crypto = { git = "https://github.com/zcash-hackworks/sapling-crypto.git", rev = "21084bde2019c04bd34208e63c3560fe2c02fb0e" }
 serde_json = "1.0"
 siphasher = "0.1.1"
diff --git a/crypto/src/lib.rs b/crypto/src/lib.rs
index de57a46b..ef8f7a4d 100644
--- a/crypto/src/lib.rs
+++ b/crypto/src/lib.rs
@@ -162,6 +162,20 @@ pub fn sha256(input: &[u8]) -> H256 {
 	result
 }
 
+/// SHA-256
+#[inline]
+pub fn sha256_compress(left: &[u8], right: &[u8]) -> H256 {
+	assert_eq!(left.len(), 32, "sha-256-compress 1st argument should be 32-byte length (half-block)");
+	assert_eq!(right.len(), 32, "sha-256-compress 2nd argument should be 32-byte length (half-block)");
+
+	let mut result = H256::default();
+	let mut hasher = Sha256::new();
+	hasher.input(left);
+	hasher.input(right);
+	hasher.result_no_padding(&mut *result);
+	result
+}
+
 /// SHA-256 and RIPEMD160
 #[inline]
 pub fn dhash160(input: &[u8]) -> H160 {
@@ -215,7 +229,8 @@ impl ::std::fmt::Debug for Groth16VerifyingKey {
 #[cfg(test)]
 mod tests {
 	use primitives::bytes::Bytes;
-	use super::{ripemd160, sha1, sha256, dhash160, dhash256, siphash24, checksum};
+	use primitives::hash::H256;
+	use super::{ripemd160, sha1, sha256, dhash160, dhash256, siphash24, checksum, sha256_compress};
 
 	#[test]
 	fn test_ripemd160() {
@@ -268,4 +283,83 @@ mod tests {
 	fn test_checksum() {
 		assert_eq!(checksum(b"hello"), "9595c9df".into());
 	}
+
+
+    #[test]
+    fn half_empty_compress() {
+        let vectors = vec![
+            "da5698be17b9b46962335799779fbeca8ce5d491c0d26243bafef9ea1837a9d8",
+            "dc766fab492ccf3d1e49d4f374b5235fa56506aac2224d39f943fcd49202974c",
+            "3f0a406181105968fdaee30679e3273c66b72bf9a7f5debbf3b5a0a26e359f92",
+            "26b0052694fc42fdff93e6fb5a71d38c3dd7dc5b6ad710eb048c660233137fab",
+            "0109ecc0722659ff83450b8f7b8846e67b2859f33c30d9b7acd5bf39cae54e31",
+            "3f909b8ce3d7ffd8a5b30908f605a03b0db85169558ddc1da7bbbcc9b09fd325",
+            "40460fa6bc692a06f47521a6725a547c028a6a240d8409f165e63cb54da2d23f",
+            "8c085674249b43da1b9a31a0e820e81e75f342807b03b6b9e64983217bc2b38e",
+            "a083450c1ba2a3a7be76fad9d13bc37be4bf83bd3e59fc375a36ba62dc620298",
+            "1ddddabc2caa2de9eff9e18c8c5a39406d7936e889bc16cfabb144f5c0022682",
+            "c22d8f0b5e4056e5f318ba22091cc07db5694fbeb5e87ef0d7e2c57ca352359e",
+            "89a434ae1febd7687eceea21d07f20a2512449d08ce2eee55871cdb9d46c1233",
+            "7333dbffbd11f09247a2b33a013ec4c4342029d851e22ba485d4461851370c15",
+            "5dad844ab9466b70f745137195ca221b48f346abd145fb5efc23a8b4ba508022",
+            "507e0dae81cbfbe457fd370ef1ca4201c2b6401083ddab440e4a038dc1e358c4",
+            "bdcdb3293188c9807d808267018684cfece07ac35a42c00f2c79b4003825305d",
+            "bab5800972a16c2c22530c66066d0a5867e987bed21a6d5a450b683cf1cfd709",
+            "11aa0b4ad29b13b057a31619d6500d636cd735cdd07d811ea265ec4bcbbbd058",
+            "5145b1b055c2df02b95675e3797b91de1b846d25003c0a803d08900728f2cd6a",
+            "0323f2850bf3444f4b4c5c09a6057ec7169190f45acb9e46984ab3dfcec4f06a",
+            "671546e26b1da1af754531e26d8a6a51073a57ddd72dc472efb43fcb257cffff",
+            "bb23a9bba56de57cb284b0d2b01c642cf79c9a5563f0067a21292412145bd78a",
+            "f30cc836b9f71b4e7ee3c72b1fd253268af9a27e9d7291a23d02821b21ddfd16",
+            "58a2753dade103cecbcda50b5ebfce31e12d41d5841dcc95620f7b3d50a1b9a1",
+            "925e6d474a5d8d3004f29da0dd78d30ae3824ce79dfe4934bb29ec3afaf3d521",
+            "08f279618616bcdd4eadc9c7a9062691a59b43b07e2c1e237f17bd189cd6a8fe",
+            "c92b32db42f42e2bf0a59df9055be5c669d3242df45357659b75ae2c27a76f50",
+            "c0db2a74998c50eb7ba6534f6d410efc27c4bb88acb0222c7906ea28a327b511",
+            "d7c612c817793191a1e68652121876d6b3bde40f4fa52bc314145ce6e5cdd259",
+            "b22370106c67a17209f6130bc09f735d83aa2c04fc4fe72ea5d80b216723e7ce",
+            "9f67d5f664664c901940eee3d02dd5b3e4b92e7b42820c42fc5159e91b41172a",
+            "ac58cd1388fec290d398f1944b564449a63c815880566bd1d189f7839e3b0c8c",
+            "5698eae7c8515ed05a70339bdf7c1028e7acca13a4fa97d9538f01ac8d889ae3",
+            "2d4995770a76fb93314ca74b3524ea1db5688ad0a76183ea17204a8f024a9f3b",
+            "5e8992c1b072c16e9e28a85358fb5fb6901a81587766dadb7aa0b973ded2f264",
+            "e95db71e1f7291ba5499461bc715203e29b84bfa4283e3bb7f470a15d0e1584e",
+            "41f078bd1824c8a4b71964f394aa595084d8eb17b97a3630433af70d10e0eff6",
+            "a1913fe6b20132312f8c1f00ddd63cec7a03f5f1d7d83492fa284c0b5d6320b0",
+            "ba9440c4dbfcf55ceb605a5b8990fc11f8ef22870d8d12e130f986491eae84b3",
+            "49db2d5e22b8015cae4810d75e54014c5469862738e161ec96ec20218718828a",
+            "d4851fb8431edfbb8b1e85ada6895967c2dac87df344992a05faf1ecf836eec9",
+            "e4ab9f4470f00cd196d47c75c82e7adaf06fe17e042e3953d93bb5d56d8cd8fb",
+            "7e4320434849ecb357f1afaaba21a54400ef2d11cff83b937d87fdafa49f8199",
+            "020adc98d96cfbbcca15fc3aa03760ed286686c35b5d92c7cb64a999b394a854",
+            "3a26b29fe1acfdd6c6a151bcc3dbcb95a10ebe2f0553f80779569b67b7244e77",
+            "ec2d0986e6a0ddf43897b2d4f23bb034f538ffe00827f310dc4963f3267f0bfb",
+            "d48073f8819f81f0358e3fc35a047cc74082ae1cb7ee22fb609c01649342d0e6",
+            "ad8037601793f172441ecb00dc138d9fc5957125ecc382ec65e36f817dc799fb",
+            "ca500a5441f36f4df673d6b8ed075d36dae2c7e6481428c70a5a76b7a9bebce8",
+            "422b6ddd473231dc4d56fe913444ccd56f7c61f747ba57ca946d5fef72d840a0",
+            "ab41f4ecb7d7089615800e19fcc53b8379ed05ee35c82567095583fd90ff3035",
+            "bbf7618248354ceb1bc1fc9dbc42c426a4e2c1e0d443c5683a9256c62ecdc26f",
+            "e50ae71479fc8ec569192a13072e011afc249f471af09500ea39f75d0af856bf",
+            "e74c0b9220147db2d50a3b58d413775d16c984690be7d90f0bc43d99dba1b689",
+            "29324a0a48d11657a51ba08b004879bfcfc66a1acb7ce36dfe478d2655484b48",
+            "88952e3d0ac06cb16b665201122249659a22325e01c870f49e29da6b1757e082",
+            "cdf879f2435b95af042a3bf7b850f7819246c805285803d67ffbf4f295bed004",
+            "e005e324200b4f428c62bc3331e695c373607cd0faa9790341fa3ba1ed228bc5",
+            "354447727aa9a53dd8345b6b6c693443e56ef4aeba13c410179fc8589e7733d5",
+            "da52dda91f2829c15c0e58d29a95360b86ab30cf0cac8101832a29f38c3185f1",
+            "c7da7814e228e1144411d78b536092fe920bcdfcc36cf19d1259047b267d58b5",
+            "aba1f68b6c2b4db6cc06a7340e12313c4b4a4ea6deb17deb3e1e66cd8eacf32b",
+            "c160ae4f64ab764d864a52ad5e33126c4b5ce105a47deedd75bc70199a5247ef",
+            "eadf23fc99d514dd8ea204d223e98da988831f9b5d1940274ca520b7fb173d8a",
+            "5b8e14facac8a7c7a3bfee8bae71f2f7793d3ad5fe3383f93ab6061f2a11bb02"
+        ];
+
+        let mut next = H256::from(&[0u8; 32][..]);
+
+        for idx in 0..vectors.len() {
+            next = sha256_compress(&next[..], &next[..]);
+            assert_eq!(next, H256::from(vectors[idx]));
+        }
+    }
 }