diff --git a/cmd/priv_val_server/main.go b/cmd/priv_val_server/main.go
new file mode 100644
index 000000000..57c3355f9
--- /dev/null
+++ b/cmd/priv_val_server/main.go
@@ -0,0 +1,47 @@
+package main
+
+import (
+	"flag"
+	"os"
+
+	cmn "github.com/tendermint/tmlibs/common"
+	"github.com/tendermint/tmlibs/log"
+
+	priv_val "github.com/tendermint/tendermint/types/priv_validator"
+)
+
+func main() {
+	var (
+		chainID     = flag.String("chain-id", "mychain", "chain id")
+		listenAddr  = flag.String("laddr", ":46659", "Validator listen address (0.0.0.0:0 means any interface, any port")
+		maxConn     = flag.Int("clients", 3, "maximum of concurrent connections")
+		privValPath = flag.String("priv", "", "priv val file path")
+
+		logger = log.NewTMLogger(log.NewSyncWriter(os.Stdout)).With("module", "priv_val")
+	)
+	flag.Parse()
+
+	logger.Info(
+		"Starting private validator",
+		"chainID", *chainID,
+		"listenAddr", *listenAddr,
+		"maxConn", *maxConn,
+		"privPath", *privValPath,
+	)
+
+	privVal := priv_val.LoadPrivValidatorJSON(*privValPath)
+
+	pvss := priv_val.NewPrivValidatorSocketServer(
+		logger,
+		*chainID,
+		*listenAddr,
+		*maxConn,
+		privVal,
+		nil,
+	)
+	pvss.Start()
+
+	cmn.TrapSignal(func() {
+		pvss.Stop()
+	})
+}
diff --git a/cmd/tendermint/commands/run_node.go b/cmd/tendermint/commands/run_node.go
index 76d61671d..481aa0729 100644
--- a/cmd/tendermint/commands/run_node.go
+++ b/cmd/tendermint/commands/run_node.go
@@ -14,6 +14,10 @@ func AddNodeFlags(cmd *cobra.Command) {
 	// bind flags
 	cmd.Flags().String("moniker", config.Moniker, "Node Name")
 
+	// priv val flags
+	cmd.Flags().String("priv_validator_addr", config.PrivValidatorAddr, "Socket address for private validator")
+	cmd.Flags().Int("priv_validator_max_conn", config.PrivValidatorMaxConn, "Limit of concurrent connections to the PrivValidator")
+
 	// node flags
 	cmd.Flags().Bool("fast_sync", config.FastSync, "Fast blockchain syncing")
 
diff --git a/config/config.go b/config/config.go
index 621847bd0..bdafa7a62 100644
--- a/config/config.go
+++ b/config/config.go
@@ -20,9 +20,11 @@ var (
 
 	defaultConfigFileName  = "config.toml"
 	defaultGenesisJSONName = "genesis.json"
-	defaultPrivValName     = "priv_validator.json"
-	defaultNodeKeyName     = "node_key.json"
-	defaultAddrBookName    = "addrbook.json"
+
+	defaultPrivValName    = "priv_validator.json"
+	defaultPrivValMaxConn = 3
+	defaultNodeKeyName    = "node_key.json"
+	defaultAddrBookName   = "addrbook.json"
 
 	defaultConfigFilePath  = filepath.Join(defaultConfigDir, defaultConfigFileName)
 	defaultGenesisJSONPath = filepath.Join(defaultConfigDir, defaultGenesisJSONName)
@@ -103,6 +105,12 @@ type BaseConfig struct {
 	// A custom human readable name for this node
 	Moniker string `mapstructure:"moniker"`
 
+	// TCP or UNIX socket address of the PrivValidator server
+	PrivValidatorAddr string `mapstructure:"priv_validator_addr"`
+
+	// Limit of concurrent connections to the PrivValidator.
+	PrivValidatorMaxConn int `mapstructure:"priv_validator_max_conn"`
+
 	// TCP or UNIX socket address of the ABCI application,
 	// or the name of an ABCI application compiled in with the Tendermint binary
 	ProxyApp string `mapstructure:"proxy_app"`
@@ -139,18 +147,19 @@ func (c BaseConfig) ChainID() string {
 // DefaultBaseConfig returns a default base configuration for a Tendermint node
 func DefaultBaseConfig() BaseConfig {
 	return BaseConfig{
-		Genesis:           defaultGenesisJSONPath,
-		PrivValidator:     defaultPrivValPath,
-		NodeKey:           defaultNodeKeyPath,
-		Moniker:           defaultMoniker,
-		ProxyApp:          "tcp://127.0.0.1:46658",
-		ABCI:              "socket",
-		LogLevel:          DefaultPackageLogLevels(),
-		ProfListenAddress: "",
-		FastSync:          true,
-		FilterPeers:       false,
-		DBBackend:         "leveldb",
-		DBPath:            "data",
+		Genesis:              defaultGenesisJSONPath,
+		PrivValidator:        defaultPrivValPath,
+		PrivValidatorMaxConn: defaultPrivValMaxConn,
+		NodeKey:              defaultNodeKeyPath,
+		Moniker:              defaultMoniker,
+		ProxyApp:             "tcp://127.0.0.1:46658",
+		ABCI:                 "socket",
+		LogLevel:             DefaultPackageLogLevels(),
+		ProfListenAddress:    "",
+		FastSync:             true,
+		FilterPeers:          false,
+		DBBackend:            "leveldb",
+		DBPath:               "data",
 	}
 }
 
diff --git a/docs/architecture/adr-008-priv-validator.md b/docs/architecture/adr-008-priv-validator.md
index dfee112c6..94d164785 100644
--- a/docs/architecture/adr-008-priv-validator.md
+++ b/docs/architecture/adr-008-priv-validator.md
@@ -8,7 +8,7 @@ For instance, see https://github.com/tendermint/tendermint/issues/673
 
 The goal is to have a clean PrivValidator interface like:
 
-``
+```
 type PrivValidator interface {
 	Address() data.Bytes
 	PubKey() crypto.PubKey
@@ -60,6 +60,7 @@ type ValidatorID struct {
 	Address data.Bytes    `json:"address"`
 	PubKey  crypto.PubKey `json:"pub_key"`
 }
+```
 
 ### LastSignedInfo
 
diff --git a/node/node.go b/node/node.go
index cd2b4bcb5..4a0afd852 100644
--- a/node/node.go
+++ b/node/node.go
@@ -34,6 +34,7 @@ import (
 	"github.com/tendermint/tendermint/state/txindex/kv"
 	"github.com/tendermint/tendermint/state/txindex/null"
 	"github.com/tendermint/tendermint/types"
+	priv_val "github.com/tendermint/tendermint/types/priv_validator"
 	"github.com/tendermint/tendermint/version"
 
 	_ "net/http/pprof"
@@ -82,7 +83,8 @@ func DefaultNewNode(config *cfg.Config, logger log.Logger) (*Node, error) {
 		proxy.DefaultClientCreator(config.ProxyApp, config.ABCI, config.DBDir()),
 		DefaultGenesisDocProviderFunc(config),
 		DefaultDBProvider,
-		logger)
+		logger,
+	)
 }
 
 //------------------------------------------------------------------------------
@@ -171,6 +173,22 @@ func NewNode(config *cfg.Config,
 	// reload the state (it may have been updated by the handshake)
 	state = sm.LoadState(stateDB)
 
+	if config.PrivValidatorAddr != "" {
+		var (
+			privKey = crypto.GenPrivKeyEd25519()
+			pvss    = priv_val.NewPrivValidatorSocketServer(
+				logger.With("module", "priv_val"),
+				config.ChainID(),
+				config.PrivValidatorAddr,
+				config.PrivValidatorMaxConn,
+				priv_val.LoadPrivValidatorJSON(config.PrivValidatorFile()),
+				&privKey,
+			)
+		)
+
+		pvss.Start()
+	}
+
 	// Decide whether to fast-sync or not
 	// We don't fast-sync when the only validator is us.
 	fastSync := config.FastSync
diff --git a/types/canonical_json.go b/types/canonical_json.go
index 45d12b45f..879bb5c52 100644
--- a/types/canonical_json.go
+++ b/types/canonical_json.go
@@ -9,8 +9,8 @@ import (
 
 // canonical json is go-wire's json for structs with fields in alphabetical order
 
-// timeFormat is used for generating the sigs
-const timeFormat = wire.RFC3339Millis
+// TimeFormat is used for generating the sigs
+const TimeFormat = wire.RFC3339Millis
 
 type CanonicalJSONBlockID struct {
 	Hash        cmn.HexBytes               `json:"hash,omitempty"`
@@ -117,5 +117,5 @@ func CanonicalTime(t time.Time) string {
 	// note that sending time over go-wire resets it to
 	// local time, we need to force UTC here, so the
 	// signatures match
-	return t.UTC().Format(timeFormat)
+	return t.UTC().Format(TimeFormat)
 }
diff --git a/types/priv_validator.go b/types/priv_validator.go
index 062fe09d2..237e3f796 100644
--- a/types/priv_validator.go
+++ b/types/priv_validator.go
@@ -34,6 +34,56 @@ func voteToStep(vote *Vote) int8 {
 	}
 }
 
+//--------------------------------------------------------------
+// PrivValidator is being upgraded! See types/priv_validator
+
+// ValidatorID contains the identity of the validator.
+type ValidatorID struct {
+	Address cmn.HexBytes  `json:"address"`
+	PubKey  crypto.PubKey `json:"pub_key"`
+}
+
+// PrivValidator defines the functionality of a local Tendermint validator
+// that signs votes, proposals, and heartbeats, and never double signs.
+type PrivValidator2 interface {
+	Address() (Address, error) // redundant since .PubKey().Address()
+	PubKey() (crypto.PubKey, error)
+
+	SignVote(chainID string, vote *Vote) error
+	SignProposal(chainID string, proposal *Proposal) error
+	SignHeartbeat(chainID string, heartbeat *Heartbeat) error
+}
+
+type TestSigner interface {
+	Address() cmn.HexBytes
+	PubKey() crypto.PubKey
+	Sign([]byte) (crypto.Signature, error)
+}
+
+func GenSigner() TestSigner {
+	return &DefaultTestSigner{
+		crypto.GenPrivKeyEd25519().Wrap(),
+	}
+}
+
+type DefaultTestSigner struct {
+	crypto.PrivKey
+}
+
+func (ds *DefaultTestSigner) Address() cmn.HexBytes {
+	return ds.PubKey().Address()
+}
+
+func (ds *DefaultTestSigner) PubKey() crypto.PubKey {
+	return ds.PrivKey.PubKey()
+}
+
+func (ds *DefaultTestSigner) Sign(msg []byte) (crypto.Signature, error) {
+	return ds.PrivKey.Sign(msg), nil
+}
+
+//--------------------------------------------------------------
+
 // PrivValidator defines the functionality of a local Tendermint validator
 // that signs votes, proposals, and heartbeats, and never double signs.
 type PrivValidator interface {
@@ -379,7 +429,7 @@ func checkVotesOnlyDifferByTimestamp(lastSignBytes, newSignBytes []byte) (time.T
 		panic(fmt.Sprintf("signBytes cannot be unmarshalled into vote: %v", err))
 	}
 
-	lastTime, err := time.Parse(timeFormat, lastVote.Vote.Timestamp)
+	lastTime, err := time.Parse(TimeFormat, lastVote.Vote.Timestamp)
 	if err != nil {
 		panic(err)
 	}
@@ -405,7 +455,7 @@ func checkProposalsOnlyDifferByTimestamp(lastSignBytes, newSignBytes []byte) (ti
 		panic(fmt.Sprintf("signBytes cannot be unmarshalled into proposal: %v", err))
 	}
 
-	lastTime, err := time.Parse(timeFormat, lastProposal.Proposal.Timestamp)
+	lastTime, err := time.Parse(TimeFormat, lastProposal.Proposal.Timestamp)
 	if err != nil {
 		panic(err)
 	}
diff --git a/types/priv_validator/json.go b/types/priv_validator/json.go
index 446587765..6e5261386 100644
--- a/types/priv_validator/json.go
+++ b/types/priv_validator/json.go
@@ -13,7 +13,7 @@ import (
 )
 
 // PrivValidator aliases types.PrivValidator
-type PrivValidator = types.PrivValidator
+type PrivValidator = types.PrivValidator2
 
 //-----------------------------------------------------
 
@@ -42,7 +42,7 @@ func (pk *PrivKey) UnmarshalJSON(b []byte) error {
 
 //-----------------------------------------------------
 
-var _ types.PrivValidator = (*PrivValidatorJSON)(nil)
+var _ types.PrivValidator2 = (*PrivValidatorJSON)(nil)
 
 // PrivValidatorJSON wraps PrivValidatorUnencrypted
 // and persists it to disk after every SignVote and SignProposal.
@@ -76,7 +76,12 @@ func (pvj *PrivValidatorJSON) SignProposal(chainID string, proposal *types.Propo
 
 // String returns a string representation of the PrivValidatorJSON.
 func (pvj *PrivValidatorJSON) String() string {
-	return fmt.Sprintf("PrivValidator{%v %v}", pvj.Address(), pvj.PrivValidatorUnencrypted.String())
+	addr, err := pvj.Address()
+	if err != nil {
+		panic(err)
+	}
+
+	return fmt.Sprintf("PrivValidator{%v %v}", addr, pvj.PrivValidatorUnencrypted.String())
 }
 
 func (pvj *PrivValidatorJSON) Save() {
@@ -170,7 +175,17 @@ func (pvs PrivValidatorsByAddress) Len() int {
 }
 
 func (pvs PrivValidatorsByAddress) Less(i, j int) bool {
-	return bytes.Compare(pvs[i].Address(), pvs[j].Address()) == -1
+	iaddr, err := pvs[j].Address()
+	if err != nil {
+		panic(err)
+	}
+
+	jaddr, err := pvs[i].Address()
+	if err != nil {
+		panic(err)
+	}
+
+	return bytes.Compare(iaddr, jaddr) == -1
 }
 
 func (pvs PrivValidatorsByAddress) Swap(i, j int) {
diff --git a/types/priv_validator/priv_validator_test.go b/types/priv_validator/priv_validator_test.go
index 33f8338d4..664d59cf2 100644
--- a/types/priv_validator/priv_validator_test.go
+++ b/types/priv_validator/priv_validator_test.go
@@ -11,13 +11,13 @@ import (
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 	crypto "github.com/tendermint/go-crypto"
-	data "github.com/tendermint/go-wire/data"
-	"github.com/tendermint/tendermint/types"
 	cmn "github.com/tendermint/tmlibs/common"
+
+	"github.com/tendermint/tendermint/types"
 )
 
 func TestGenLoadValidator(t *testing.T) {
-	assert := assert.New(t)
+	assert, require := assert.New(t), require.New(t)
 
 	_, tempFilePath := cmn.Tempfile("priv_validator_")
 	privVal := GenPrivValidatorJSON(tempFilePath)
@@ -25,24 +25,33 @@ func TestGenLoadValidator(t *testing.T) {
 	height := int64(100)
 	privVal.LastSignedInfo.Height = height
 	privVal.Save()
-	addr := privVal.Address()
+	addr, err := privVal.Address()
+	require.Nil(err)
 
 	privVal = LoadPrivValidatorJSON(tempFilePath)
-	assert.Equal(addr, privVal.Address(), "expected privval addr to be the same")
+	pAddr, err := privVal.Address()
+	require.Nil(err)
+
+	assert.Equal(addr, pAddr, "expected privval addr to be the same")
 	assert.Equal(height, privVal.LastSignedInfo.Height, "expected privval.LastHeight to have been saved")
 }
 
 func TestLoadOrGenValidator(t *testing.T) {
-	assert := assert.New(t)
+	assert, require := assert.New(t), require.New(t)
 
 	_, tempFilePath := cmn.Tempfile("priv_validator_")
 	if err := os.Remove(tempFilePath); err != nil {
 		t.Error(err)
 	}
 	privVal := LoadOrGenPrivValidatorJSON(tempFilePath)
-	addr := privVal.Address()
+	addr, err := privVal.Address()
+	require.Nil(err)
+
 	privVal = LoadOrGenPrivValidatorJSON(tempFilePath)
-	assert.Equal(addr, privVal.Address(), "expected privval addr to be the same")
+	pAddr, err := privVal.Address()
+	require.Nil(err)
+
+	assert.Equal(addr, pAddr, "expected privval addr to be the same")
 }
 
 func TestUnmarshalValidator(t *testing.T) {
@@ -87,8 +96,14 @@ func TestUnmarshalValidator(t *testing.T) {
 	require.Nil(err, "%+v", err)
 
 	// make sure the values match
-	assert.EqualValues(addrBytes, val.Address())
-	assert.EqualValues(pubKey, val.PubKey())
+	vAddr, err := val.Address()
+	require.Nil(err)
+
+	pKey, err := val.PubKey()
+	require.Nil(err)
+
+	assert.EqualValues(addrBytes, vAddr)
+	assert.EqualValues(pubKey, pKey)
 	assert.EqualValues(privKey, val.PrivKey)
 
 	// export it and make sure it is the same
@@ -98,7 +113,7 @@ func TestUnmarshalValidator(t *testing.T) {
 }
 
 func TestSignVote(t *testing.T) {
-	assert := assert.New(t)
+	assert, require := assert.New(t), require.New(t)
 
 	_, tempFilePath := cmn.Tempfile("priv_validator_")
 	privVal := GenPrivValidatorJSON(tempFilePath)
@@ -109,8 +124,11 @@ func TestSignVote(t *testing.T) {
 	voteType := types.VoteTypePrevote
 
 	// sign a vote for first time
-	vote := newVote(privVal.Address(), 0, height, round, voteType, block1)
-	err := privVal.SignVote("mychainid", vote)
+	addr, err := privVal.Address()
+	require.Nil(err)
+
+	vote := newVote(addr, 0, height, round, voteType, block1)
+	err = privVal.SignVote("mychainid", vote)
 	assert.NoError(err, "expected no error signing vote")
 
 	// try to sign the same vote again; should be fine
@@ -119,10 +137,10 @@ func TestSignVote(t *testing.T) {
 
 	// now try some bad votes
 	cases := []*types.Vote{
-		newVote(privVal.Address(), 0, height, round-1, voteType, block1),   // round regression
-		newVote(privVal.Address(), 0, height-1, round, voteType, block1),   // height regression
-		newVote(privVal.Address(), 0, height-2, round+4, voteType, block1), // height regression and different round
-		newVote(privVal.Address(), 0, height, round, voteType, block2),     // different block
+		newVote(addr, 0, height, round-1, voteType, block1),   // round regression
+		newVote(addr, 0, height-1, round, voteType, block1),   // height regression
+		newVote(addr, 0, height-2, round+4, voteType, block1), // height regression and different round
+		newVote(addr, 0, height, round, voteType, block2),     // different block
 	}
 
 	for _, c := range cases {
@@ -179,6 +197,8 @@ func TestSignProposal(t *testing.T) {
 }
 
 func TestDifferByTimestamp(t *testing.T) {
+	require := require.New(t)
+
 	_, tempFilePath := cmn.Tempfile("priv_validator_")
 	privVal := GenPrivValidatorJSON(tempFilePath)
 
@@ -208,10 +228,13 @@ func TestDifferByTimestamp(t *testing.T) {
 
 	// test vote
 	{
+		addr, err := privVal.Address()
+		require.Nil(err)
+
 		voteType := types.VoteTypePrevote
 		blockID := types.BlockID{[]byte{1, 2, 3}, types.PartSetHeader{}}
-		vote := newVote(privVal.Address(), 0, height, round, voteType, blockID)
-		err := privVal.SignVote("mychainid", vote)
+		vote := newVote(addr, 0, height, round, voteType, blockID)
+		err = privVal.SignVote("mychainid", vote)
 		assert.NoError(t, err, "expected no error signing vote")
 
 		signBytes := types.SignBytes(chainID, vote)
@@ -230,7 +253,7 @@ func TestDifferByTimestamp(t *testing.T) {
 	}
 }
 
-func newVote(addr data.Bytes, idx int, height int64, round int, typ byte, blockID types.BlockID) *types.Vote {
+func newVote(addr cmn.HexBytes, idx int, height int64, round int, typ byte, blockID types.BlockID) *types.Vote {
 	return &types.Vote{
 		ValidatorAddress: addr,
 		ValidatorIndex:   idx,
diff --git a/types/priv_validator/sign_info.go b/types/priv_validator/sign_info.go
index 1a3dae442..60113c570 100644
--- a/types/priv_validator/sign_info.go
+++ b/types/priv_validator/sign_info.go
@@ -8,8 +8,8 @@ import (
 	"time"
 
 	crypto "github.com/tendermint/go-crypto"
-	data "github.com/tendermint/go-wire/data"
 	"github.com/tendermint/tendermint/types"
+	cmn "github.com/tendermint/tmlibs/common"
 )
 
 // TODO: type ?
@@ -40,7 +40,7 @@ type LastSignedInfo struct {
 	Round     int              `json:"round"`
 	Step      int8             `json:"step"`
 	Signature crypto.Signature `json:"signature,omitempty"` // so we dont lose signatures
-	SignBytes data.Bytes       `json:"signbytes,omitempty"` // so we dont lose signatures
+	SignBytes cmn.HexBytes     `json:"signbytes,omitempty"` // so we dont lose signatures
 }
 
 func NewLastSignedInfo() *LastSignedInfo {
diff --git a/types/priv_validator/socket.go b/types/priv_validator/socket.go
index 9fdc8c205..a6b4b87bf 100644
--- a/types/priv_validator/socket.go
+++ b/types/priv_validator/socket.go
@@ -1,68 +1,87 @@
 package types
 
 import (
-	"bytes"
 	"fmt"
+	"io"
 	"net"
 	"time"
 
+	"github.com/pkg/errors"
 	crypto "github.com/tendermint/go-crypto"
 	wire "github.com/tendermint/go-wire"
-	"github.com/tendermint/go-wire/data"
 	cmn "github.com/tendermint/tmlibs/common"
 	"github.com/tendermint/tmlibs/log"
+	"golang.org/x/net/netutil"
 
+	p2pconn "github.com/tendermint/tendermint/p2p/conn"
 	"github.com/tendermint/tendermint/types"
 )
 
+const (
+	connDeadlineSeconds      = 3
+	dialRetryIntervalSeconds = 1
+	dialRetryMax             = 10
+)
+
+// Socket errors.
+var (
+	ErrDialRetryMax = errors.New("Error max client retries")
+)
+
+var (
+	connDeadline = time.Second * connDeadlineSeconds
+)
+
 //-----------------------------------------------------------------
 
-var _ types.PrivValidator = (*PrivValidatorSocketClient)(nil)
+var _ types.PrivValidator2 = (*PrivValidatorSocketClient)(nil)
 
 // PrivValidatorSocketClient implements PrivValidator.
 // It uses a socket to request signatures.
 type PrivValidatorSocketClient struct {
 	cmn.BaseService
 
-	conn net.Conn
+	conn    net.Conn
+	privKey *crypto.PrivKeyEd25519
 
 	ID            types.ValidatorID
 	SocketAddress string
 }
 
-const (
-	dialRetryIntervalSeconds = 1
-)
-
-// NewPrivValidatorSocket returns an instance of PrivValidatorSocket.
-func NewPrivValidatorSocketClient(logger log.Logger, socketAddr string) *PrivValidatorSocketClient {
+// NewPrivValidatorSocketClient returns an instance of
+// PrivValidatorSocketClient.
+func NewPrivValidatorSocketClient(
+	logger log.Logger,
+	socketAddr string,
+	privKey *crypto.PrivKeyEd25519,
+) *PrivValidatorSocketClient {
 	pvsc := &PrivValidatorSocketClient{
 		SocketAddress: socketAddr,
+		privKey:       privKey,
 	}
+
 	pvsc.BaseService = *cmn.NewBaseService(logger, "privValidatorSocketClient", pvsc)
+
 	return pvsc
 }
 
+// OnStart implements cmn.Service.
 func (pvsc *PrivValidatorSocketClient) OnStart() error {
 	if err := pvsc.BaseService.OnStart(); err != nil {
 		return err
 	}
 
-	var err error
-	var conn net.Conn
-RETRY_LOOP:
-	for {
-		conn, err = cmn.Connect(pvsc.SocketAddress)
-		if err != nil {
-			pvsc.Logger.Error(fmt.Sprintf("PrivValidatorSocket failed to connect to %v.  Retrying...", pvsc.SocketAddress))
-			time.Sleep(time.Second * dialRetryIntervalSeconds)
-			continue RETRY_LOOP
-		}
-		pvsc.conn = conn
-		return nil
+	conn, err := pvsc.connect()
+	if err != nil {
+		return err
 	}
+
+	pvsc.conn = conn
+
+	return nil
 }
 
+// OnStop implements cmn.Service.
 func (pvsc *PrivValidatorSocketClient) OnStop() {
 	pvsc.BaseService.OnStop()
 
@@ -71,46 +90,130 @@ func (pvsc *PrivValidatorSocketClient) OnStop() {
 	}
 }
 
-func (pvsc *PrivValidatorSocketClient) Address() data.Bytes {
-	pubKey := pvsc.PubKey()
-	return pubKey.Address()
+// Address is an alias for PubKey().Address().
+func (pvsc *PrivValidatorSocketClient) Address() (cmn.HexBytes, error) {
+	p, err := pvsc.PubKey()
+	if err != nil {
+		return nil, err
+	}
+
+	return p.Address(), nil
 }
 
-func (pvsc *PrivValidatorSocketClient) PubKey() crypto.PubKey {
-	res, err := readWrite(pvsc.conn, PubKeyMsg{})
+// PubKey implements PrivValidator.
+func (pvsc *PrivValidatorSocketClient) PubKey() (crypto.PubKey, error) {
+	err := writeMsg(pvsc.conn, &PubKeyMsg{})
+	if err != nil {
+		return crypto.PubKey{}, err
+	}
+
+	res, err := readMsg(pvsc.conn)
 	if err != nil {
-		panic(err)
+		return crypto.PubKey{}, err
 	}
-	return res.(PubKeyMsg).PubKey
+
+	return res.(*PubKeyMsg).PubKey, nil
 }
 
+// SignVote implements PrivValidator.
 func (pvsc *PrivValidatorSocketClient) SignVote(chainID string, vote *types.Vote) error {
-	res, err := readWrite(pvsc.conn, SignVoteMsg{Vote: vote})
+	err := writeMsg(pvsc.conn, &SignVoteMsg{Vote: vote})
+	if err != nil {
+		return err
+	}
+
+	res, err := readMsg(pvsc.conn)
 	if err != nil {
 		return err
 	}
-	*vote = *res.(SignVoteMsg).Vote
+
+	*vote = *res.(*SignVoteMsg).Vote
+
 	return nil
 }
 
+// SignProposal implements PrivValidator.
 func (pvsc *PrivValidatorSocketClient) SignProposal(chainID string, proposal *types.Proposal) error {
-	res, err := readWrite(pvsc.conn, SignProposalMsg{Proposal: proposal})
+	err := writeMsg(pvsc.conn, &SignProposalMsg{Proposal: proposal})
+	if err != nil {
+		return err
+	}
+
+	res, err := readMsg(pvsc.conn)
 	if err != nil {
 		return err
 	}
-	*proposal = *res.(SignProposalMsg).Proposal
+
+	*proposal = *res.(*SignProposalMsg).Proposal
+
 	return nil
 }
 
+// SignHeartbeat implements PrivValidator.
 func (pvsc *PrivValidatorSocketClient) SignHeartbeat(chainID string, heartbeat *types.Heartbeat) error {
-	res, err := readWrite(pvsc.conn, SignHeartbeatMsg{Heartbeat: heartbeat})
+	err := writeMsg(pvsc.conn, &SignHeartbeatMsg{Heartbeat: heartbeat})
+	if err != nil {
+		return err
+	}
+
+	res, err := readMsg(pvsc.conn)
 	if err != nil {
 		return err
 	}
-	*heartbeat = *res.(SignHeartbeatMsg).Heartbeat
+
+	*heartbeat = *res.(*SignHeartbeatMsg).Heartbeat
+
 	return nil
 }
 
+func (pvsc *PrivValidatorSocketClient) connect() (net.Conn, error) {
+	retries := dialRetryMax
+
+RETRY_LOOP:
+	for retries > 0 {
+		if retries != dialRetryMax {
+			time.Sleep(time.Second * dialRetryIntervalSeconds)
+		}
+
+		retries--
+
+		conn, err := cmn.Connect(pvsc.SocketAddress)
+		if err != nil {
+			pvsc.Logger.Error(
+				"pvsc connect",
+				"addr", pvsc.SocketAddress,
+				"err", errors.Wrap(err, "connection failed"),
+			)
+
+			continue RETRY_LOOP
+		}
+
+		if err := conn.SetDeadline(time.Now().Add(connDeadline)); err != nil {
+			pvsc.Logger.Error(
+				"pvsc connect",
+				"err", errors.Wrap(err, "setting connection timeout failed"),
+			)
+			continue
+		}
+
+		if pvsc.privKey != nil {
+			conn, err = p2pconn.MakeSecretConnection(conn, pvsc.privKey.Wrap())
+			if err != nil {
+				pvsc.Logger.Error(
+					"pvsc connect",
+					"err", errors.Wrap(err, "encrypting connection failed"),
+				)
+
+				continue RETRY_LOOP
+			}
+		}
+
+		return conn, nil
+	}
+
+	return nil, ErrDialRetryMax
+}
+
 //---------------------------------------------------------
 
 // PrivValidatorSocketServer implements PrivValidator.
@@ -118,101 +221,145 @@ func (pvsc *PrivValidatorSocketClient) SignHeartbeat(chainID string, heartbeat *
 type PrivValidatorSocketServer struct {
 	cmn.BaseService
 
-	conn        net.Conn
-	proto, addr string
-	listener    net.Listener
+	proto, addr    string
+	listener       net.Listener
+	maxConnections int
+	privKey        *crypto.PrivKeyEd25519
 
 	privVal PrivValidator
 	chainID string
 }
 
-func NewPrivValidatorSocketServer(logger log.Logger, socketAddr, chainID string, privVal PrivValidator) *PrivValidatorSocketServer {
+// NewPrivValidatorSocketServer returns an instance of
+// PrivValidatorSocketServer.
+func NewPrivValidatorSocketServer(
+	logger log.Logger,
+	chainID, socketAddr string,
+	maxConnections int,
+	privVal PrivValidator,
+	privKey *crypto.PrivKeyEd25519,
+) *PrivValidatorSocketServer {
 	proto, addr := cmn.ProtocolAndAddress(socketAddr)
 	pvss := &PrivValidatorSocketServer{
-		proto:   proto,
-		addr:    addr,
-		privVal: privVal,
-		chainID: chainID,
+		proto:          proto,
+		addr:           addr,
+		maxConnections: maxConnections,
+		privKey:        privKey,
+		privVal:        privVal,
+		chainID:        chainID,
 	}
 	pvss.BaseService = *cmn.NewBaseService(logger, "privValidatorSocketServer", pvss)
 	return pvss
 }
 
+// OnStart implements cmn.Service.
 func (pvss *PrivValidatorSocketServer) OnStart() error {
-	if err := pvss.BaseService.OnStart(); err != nil {
-		return err
-	}
 	ln, err := net.Listen(pvss.proto, pvss.addr)
 	if err != nil {
 		return err
 	}
-	pvss.listener = ln
-	go pvss.acceptConnectionsRoutine()
+
+	pvss.listener = netutil.LimitListener(ln, pvss.maxConnections)
+
+	go pvss.acceptConnections()
+
 	return nil
 }
 
+// OnStop implements cmn.Service.
 func (pvss *PrivValidatorSocketServer) OnStop() {
-	pvss.BaseService.OnStop()
-	if err := pvss.listener.Close(); err != nil {
-		pvss.Logger.Error("Error closing listener", "err", err)
+	if pvss.listener == nil {
+		return
 	}
 
-	if err := pvss.conn.Close(); err != nil {
-		pvss.Logger.Error("Error closing connection", "conn", pvss.conn, "err", err)
+	if err := pvss.listener.Close(); err != nil {
+		pvss.Logger.Error("OnStop", "err", errors.Wrap(err, "closing listener failed"))
 	}
 }
 
-func (pvss *PrivValidatorSocketServer) acceptConnectionsRoutine() {
+func (pvss *PrivValidatorSocketServer) acceptConnections() {
 	for {
-		// Accept a connection
-		pvss.Logger.Info("Waiting for new connection...")
-		var err error
-		pvss.conn, err = pvss.listener.Accept()
+		conn, err := pvss.listener.Accept()
 		if err != nil {
 			if !pvss.IsRunning() {
 				return // Ignore error from listener closing.
 			}
-			pvss.Logger.Error("Failed to accept connection: " + err.Error())
+			pvss.Logger.Error(
+				"accpetConnections",
+				"err", errors.Wrap(err, "failed to accept connection"),
+			)
 			continue
 		}
 
-		pvss.Logger.Info("Accepted a new connection")
-
-		// read/write
-		for {
-			if !pvss.IsRunning() {
-				return // Ignore error from listener closing.
-			}
+		if err := conn.SetDeadline(time.Now().Add(connDeadline)); err != nil {
+			pvss.Logger.Error(
+				"acceptConnetions",
+				"err", errors.Wrap(err, "setting connection timeout failed"),
+			)
+			continue
+		}
 
-			var n int
-			var err error
-			b := wire.ReadByteSlice(pvss.conn, 0, &n, &err) //XXX: no max
-			req_, err := decodeMsg(b)
+		if pvss.privKey != nil {
+			conn, err = p2pconn.MakeSecretConnection(conn, pvss.privKey.Wrap())
 			if err != nil {
-				panic(err)
-			}
-			var res PrivValidatorSocketMsg
-			switch req := req_.(type) {
-			case PubKeyMsg:
-				res = PubKeyMsg{pvss.privVal.PubKey()}
-			case SignVoteMsg:
-				pvss.privVal.SignVote(pvss.chainID, req.Vote)
-				res = SignVoteMsg{req.Vote}
-			case SignProposalMsg:
-				pvss.privVal.SignProposal(pvss.chainID, req.Proposal)
-				res = SignProposalMsg{req.Proposal}
-			case SignHeartbeatMsg:
-				pvss.privVal.SignHeartbeat(pvss.chainID, req.Heartbeat)
-				res = SignHeartbeatMsg{req.Heartbeat}
-			default:
-				panic(fmt.Sprintf("unknown msg: %v", req_))
+				pvss.Logger.Error(
+					"acceptConnections",
+					"err", errors.Wrap(err, "secret connection failed"),
+				)
+				continue
 			}
+		}
 
-			b = wire.BinaryBytes(res)
-			_, err = pvss.conn.Write(b)
-			if err != nil {
-				panic(err)
+		go pvss.handleConnection(conn)
+	}
+}
+
+func (pvss *PrivValidatorSocketServer) handleConnection(conn net.Conn) {
+	defer conn.Close()
+
+	for {
+		if !pvss.IsRunning() {
+			return // Ignore error from listener closing.
+		}
+
+		req, err := readMsg(conn)
+		if err != nil {
+			if err != io.EOF {
+				pvss.Logger.Error("handleConnection", "err", err)
 			}
+			return
+		}
+
+		var res PrivValidatorSocketMsg
+
+		switch r := req.(type) {
+		case *PubKeyMsg:
+			var p crypto.PubKey
+
+			p, err = pvss.privVal.PubKey()
+			res = &PubKeyMsg{p}
+		case *SignVoteMsg:
+			err = pvss.privVal.SignVote(pvss.chainID, r.Vote)
+			res = &SignVoteMsg{r.Vote}
+		case *SignProposalMsg:
+			err = pvss.privVal.SignProposal(pvss.chainID, r.Proposal)
+			res = &SignProposalMsg{r.Proposal}
+		case *SignHeartbeatMsg:
+			err = pvss.privVal.SignHeartbeat(pvss.chainID, r.Heartbeat)
+			res = &SignHeartbeatMsg{r.Heartbeat}
+		default:
+			err = fmt.Errorf("unknown msg: %v", r)
+		}
+
+		if err != nil {
+			pvss.Logger.Error("handleConnection", "err", err)
+			return
+		}
+
+		err = writeMsg(conn, res)
+		if err != nil {
+			pvss.Logger.Error("handleConnection", "err", err)
+			return
 		}
 	}
 }
@@ -226,6 +373,8 @@ const (
 	msgTypeSignHeartbeat = byte(0x12)
 )
 
+// PrivValidatorSocketMsg is a message sent between PrivValidatorSocket client
+// and server.
 type PrivValidatorSocketMsg interface{}
 
 var _ = wire.RegisterInterface(
@@ -236,38 +385,53 @@ var _ = wire.RegisterInterface(
 	wire.ConcreteType{&SignHeartbeatMsg{}, msgTypeSignHeartbeat},
 )
 
-func readWrite(conn net.Conn, req PrivValidatorSocketMsg) (res PrivValidatorSocketMsg, err error) {
-	b := wire.BinaryBytes(req)
-	_, err = conn.Write(b)
-	if err != nil {
-		return nil, err
-	}
-
-	var n int
-	b = wire.ReadByteSlice(conn, 0, &n, &err) //XXX: no max
-	return decodeMsg(b)
-}
-
-func decodeMsg(bz []byte) (msg PrivValidatorSocketMsg, err error) {
-	n := new(int)
-	r := bytes.NewReader(bz)
-	msgI := wire.ReadBinary(struct{ PrivValidatorSocketMsg }{}, r, 0, n, &err)
-	msg = msgI.(struct{ PrivValidatorSocketMsg }).PrivValidatorSocketMsg
-	return msg, err
-}
-
+// PubKeyMsg is a PrivValidatorSocket message containing the public key.
 type PubKeyMsg struct {
 	PubKey crypto.PubKey
 }
 
+// SignVoteMsg is a PrivValidatorSocket message containing a vote.
 type SignVoteMsg struct {
 	Vote *types.Vote
 }
 
+// SignProposalMsg is a PrivValidatorSocket message containing a Proposal.
 type SignProposalMsg struct {
 	Proposal *types.Proposal
 }
 
+// SignHeartbeatMsg is a PrivValidatorSocket message containing a Heartbeat.
 type SignHeartbeatMsg struct {
 	Heartbeat *types.Heartbeat
 }
+
+func readMsg(r io.Reader) (PrivValidatorSocketMsg, error) {
+	var (
+		n   int
+		err error
+	)
+
+	read := wire.ReadBinary(struct{ PrivValidatorSocketMsg }{}, r, 0, &n, &err)
+	if err != nil {
+		return nil, err
+	}
+
+	w, ok := read.(struct{ PrivValidatorSocketMsg })
+	if !ok {
+		return nil, errors.New("unknwon type")
+	}
+
+	return w.PrivValidatorSocketMsg, nil
+}
+
+func writeMsg(w io.Writer, msg interface{}) error {
+	var (
+		err error
+		n   int
+	)
+
+	// TODO(xla): This extra wrap should be gone with the sdk-2 update.
+	wire.WriteBinary(struct{ PrivValidatorSocketMsg }{msg}, w, &n, &err)
+
+	return err
+}
diff --git a/types/priv_validator/socket_test.go b/types/priv_validator/socket_test.go
new file mode 100644
index 000000000..9a290abb4
--- /dev/null
+++ b/types/priv_validator/socket_test.go
@@ -0,0 +1,148 @@
+package types
+
+import (
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+
+	crypto "github.com/tendermint/go-crypto"
+	"github.com/tendermint/tmlibs/log"
+
+	"github.com/tendermint/tendermint/types"
+)
+
+func TestPrivValidatorSocketServer(t *testing.T) {
+	var (
+		assert, require = assert.New(t), require.New(t)
+		chainID         = "test-chain-secret"
+		logger          = log.TestingLogger()
+		signer          = types.GenSigner()
+		clientPrivKey   = crypto.GenPrivKeyEd25519()
+		serverPrivKey   = crypto.GenPrivKeyEd25519()
+		privVal         = NewTestPrivValidator(signer)
+		pvss            = NewPrivValidatorSocketServer(
+			logger,
+			chainID,
+			"127.0.0.1:0",
+			1,
+			privVal,
+			&serverPrivKey,
+		)
+	)
+
+	err := pvss.Start()
+	require.Nil(err)
+	defer pvss.Stop()
+
+	assert.True(pvss.IsRunning())
+
+	pvsc := NewPrivValidatorSocketClient(
+		logger,
+		pvss.listener.Addr().String(),
+		&clientPrivKey,
+	)
+
+	err = pvsc.Start()
+	require.Nil(err)
+	defer pvsc.Stop()
+
+	assert.True(pvsc.IsRunning())
+
+	cAddr, err := pvsc.Address()
+	require.Nil(err)
+
+	sAddr, err := pvss.privVal.Address()
+	require.Nil(err)
+
+	assert.Equal(cAddr, sAddr)
+
+	cKey, err := pvsc.PubKey()
+	require.Nil(err)
+
+	sKey, err := pvss.privVal.PubKey()
+	require.Nil(err)
+
+	assert.Equal(cKey, sKey)
+
+	err = pvsc.SignProposal(chainID, &types.Proposal{
+		Timestamp: time.Now(),
+	})
+	require.Nil(err)
+
+	err = pvsc.SignVote(chainID, &types.Vote{
+		Timestamp: time.Now(),
+		Type:      types.VoteTypePrecommit,
+	})
+	require.Nil(err)
+
+	err = pvsc.SignHeartbeat(chainID, &types.Heartbeat{})
+	require.Nil(err)
+}
+
+func TestPrivValidatorSocketServerWithoutSecret(t *testing.T) {
+	var (
+		assert, require = assert.New(t), require.New(t)
+		chainID         = "test-chain-secret"
+		logger          = log.TestingLogger()
+		signer          = types.GenSigner()
+		privVal         = NewTestPrivValidator(signer)
+		pvss            = NewPrivValidatorSocketServer(
+			logger,
+			chainID,
+			"127.0.0.1:0",
+			1,
+			privVal,
+			nil,
+		)
+	)
+
+	err := pvss.Start()
+	require.Nil(err)
+	defer pvss.Stop()
+
+	assert.True(pvss.IsRunning())
+
+	pvsc := NewPrivValidatorSocketClient(
+		logger,
+		pvss.listener.Addr().String(),
+		nil,
+	)
+
+	err = pvsc.Start()
+	require.Nil(err)
+	defer pvsc.Stop()
+
+	assert.True(pvsc.IsRunning())
+
+	cAddr, err := pvsc.Address()
+	require.Nil(err)
+
+	sAddr, err := pvss.privVal.Address()
+	require.Nil(err)
+
+	assert.Equal(cAddr, sAddr)
+
+	cKey, err := pvsc.PubKey()
+	require.Nil(err)
+
+	sKey, err := pvss.privVal.PubKey()
+	require.Nil(err)
+
+	assert.Equal(cKey, sKey)
+
+	err = pvsc.SignProposal(chainID, &types.Proposal{
+		Timestamp: time.Now(),
+	})
+	require.Nil(err)
+
+	err = pvsc.SignVote(chainID, &types.Vote{
+		Timestamp: time.Now(),
+		Type:      types.VoteTypePrecommit,
+	})
+	require.Nil(err)
+
+	err = pvsc.SignHeartbeat(chainID, &types.Heartbeat{})
+	require.Nil(err)
+}
diff --git a/types/priv_validator/unencrypted.go b/types/priv_validator/unencrypted.go
index e9b0bb880..3ef38eeca 100644
--- a/types/priv_validator/unencrypted.go
+++ b/types/priv_validator/unencrypted.go
@@ -4,13 +4,13 @@ import (
 	"fmt"
 
 	crypto "github.com/tendermint/go-crypto"
-	data "github.com/tendermint/go-wire/data"
 	"github.com/tendermint/tendermint/types"
+	cmn "github.com/tendermint/tmlibs/common"
 )
 
 //-----------------------------------------------------------------
 
-var _ types.PrivValidator = (*PrivValidatorUnencrypted)(nil)
+var _ types.PrivValidator2 = (*PrivValidatorUnencrypted)(nil)
 
 // PrivValidatorUnencrypted implements PrivValidator.
 // It uses an in-memory crypto.PrivKey that is
@@ -35,15 +35,20 @@ func NewPrivValidatorUnencrypted(priv crypto.PrivKey) *PrivValidatorUnencrypted
 
 // String returns a string representation of the PrivValidatorUnencrypted
 func (upv *PrivValidatorUnencrypted) String() string {
-	return fmt.Sprintf("PrivValidator{%v %v}", upv.Address(), upv.LastSignedInfo.String())
+	addr, err := upv.Address()
+	if err != nil {
+		panic(err)
+	}
+
+	return fmt.Sprintf("PrivValidator{%v %v}", addr, upv.LastSignedInfo.String())
 }
 
-func (upv *PrivValidatorUnencrypted) Address() data.Bytes {
-	return upv.PrivKey.PubKey().Address()
+func (upv *PrivValidatorUnencrypted) Address() (cmn.HexBytes, error) {
+	return upv.PrivKey.PubKey().Address(), nil
 }
 
-func (upv *PrivValidatorUnencrypted) PubKey() crypto.PubKey {
-	return upv.PrivKey.PubKey()
+func (upv *PrivValidatorUnencrypted) PubKey() (crypto.PubKey, error) {
+	return upv.PrivKey.PubKey(), nil
 }
 
 func (upv *PrivValidatorUnencrypted) SignVote(chainID string, vote *types.Vote) error {
diff --git a/types/priv_validator/upgrade.go b/types/priv_validator/upgrade.go
index 6d5c472ab..063655421 100644
--- a/types/priv_validator/upgrade.go
+++ b/types/priv_validator/upgrade.go
@@ -5,18 +5,18 @@ import (
 	"io/ioutil"
 
 	crypto "github.com/tendermint/go-crypto"
-	data "github.com/tendermint/go-wire/data"
 	"github.com/tendermint/tendermint/types"
+	cmn "github.com/tendermint/tmlibs/common"
 )
 
 type PrivValidatorV1 struct {
-	Address       data.Bytes       `json:"address"`
+	Address       cmn.HexBytes     `json:"address"`
 	PubKey        crypto.PubKey    `json:"pub_key"`
 	LastHeight    int64            `json:"last_height"`
 	LastRound     int              `json:"last_round"`
 	LastStep      int8             `json:"last_step"`
 	LastSignature crypto.Signature `json:"last_signature,omitempty"` // so we dont lose signatures
-	LastSignBytes data.Bytes       `json:"last_signbytes,omitempty"` // so we dont lose signatures
+	LastSignBytes cmn.HexBytes     `json:"last_signbytes,omitempty"` // so we dont lose signatures
 	PrivKey       crypto.PrivKey   `json:"priv_key"`
 }
 
diff --git a/types/proposal_test.go b/types/proposal_test.go
index 0d2af71e2..6fbfbba05 100644
--- a/types/proposal_test.go
+++ b/types/proposal_test.go
@@ -12,7 +12,7 @@ import (
 var testProposal *Proposal
 
 func init() {
-	var stamp, err = time.Parse(timeFormat, "2018-02-11T07:09:22.765Z")
+	var stamp, err = time.Parse(TimeFormat, "2018-02-11T07:09:22.765Z")
 	if err != nil {
 		panic(err)
 	}
diff --git a/types/vote_test.go b/types/vote_test.go
index 51eca12de..5e2d5c0df 100644
--- a/types/vote_test.go
+++ b/types/vote_test.go
@@ -18,7 +18,7 @@ func examplePrecommit() *Vote {
 }
 
 func exampleVote(t byte) *Vote {
-	var stamp, err = time.Parse(timeFormat, "2017-12-25T03:00:01.234Z")
+	var stamp, err = time.Parse(TimeFormat, "2017-12-25T03:00:01.234Z")
 	if err != nil {
 		panic(err)
 	}