diff --git a/tests/README.md b/tests/README.md
index 48a6c41a7..0bf097254 100644
--- a/tests/README.md
+++ b/tests/README.md
@@ -50,6 +50,20 @@ To run the same tests on a release build, replace `debug` with `release`.
 # Functional tests
 
 [TODO]
+Functional tests are located under the `tests/functional` directory. 
+
+First, run a regtest daemon in the offline mode and with a fixed difficulty:
+```
+monerod --regtest --offline --fixed-difficulty 1
+```
+Alternatively, you can run multiple daemons and let them connect with each other by using `--add-exclusive-node`. In this case, make sure that the same fixed difficulty is given to all the daemons.
+
+Next, restore a mainnet wallet with the following seed and restore height 0 (the file path doesn't matter):
+```
+velvet lymph giddy number token physics poetry unquoted nibs useful sabotage limits benches lifestyle eden nitrogen anvil fewest avoid batch vials washing fences goat unquoted
+```
+
+Open the wallet file with `monero-wallet-rpc` with RPC port 18083. Finally, start tests by invoking ./blockchain.py or ./speed.py
 
 # Fuzz tests
 
diff --git a/tests/functional_tests/blockchain.py b/tests/functional_tests/blockchain.py
new file mode 100755
index 000000000..983658a7c
--- /dev/null
+++ b/tests/functional_tests/blockchain.py
@@ -0,0 +1,103 @@
+#!/usr/bin/env python3
+
+# Copyright (c) 2018 The Monero Project
+# 
+# All rights reserved.
+# 
+# Redistribution and use in source and binary forms, with or without modification, are
+# permitted provided that the following conditions are met:
+# 
+# 1. Redistributions of source code must retain the above copyright notice, this list of
+#    conditions and the following disclaimer.
+# 
+# 2. Redistributions in binary form must reproduce the above copyright notice, this list
+#    of conditions and the following disclaimer in the documentation and/or other
+#    materials provided with the distribution.
+# 
+# 3. Neither the name of the copyright holder nor the names of its contributors may be
+#    used to endorse or promote products derived from this software without specific
+#    prior written permission.
+# 
+# THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY
+# EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
+# MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL
+# THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+# SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
+# PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS
+# INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+# STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
+# THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+"""Test blockchain RPC calls
+
+Test the following RPCs:
+    - get_info
+    - generateblocks
+    - [TODO: many tests still need to be written]
+
+"""
+
+from test_framework.daemon import Daemon
+from test_framework.wallet import Wallet
+
+class BlockchainTest():
+    def run_test(self):
+        self._test_get_info()
+        self._test_hardfork_info()
+        self._test_generateblocks(5)
+
+    def _test_get_info(self):
+        print('Test get_info')
+
+        daemon = Daemon()
+        res = daemon.get_info()
+
+        # difficulty should be set to 1 for this test
+        assert 'difficulty' in res.keys()
+        assert res['difficulty'] == 1;
+
+        # nettype should not be TESTNET
+        assert 'testnet' in res.keys()
+        assert res['testnet'] == False;
+
+        # nettype should not be STAGENET
+        assert 'stagenet' in res.keys()
+        assert res['stagenet'] == False;
+
+        # nettype should be FAKECHAIN
+        assert 'nettype' in res.keys()
+        assert res['nettype'] == "fakechain";
+
+        # free_space should be > 0
+        assert 'free_space' in res.keys()
+        assert res['free_space'] > 0
+
+        # height should be greater or equal to 1
+        assert 'height' in res.keys()
+        assert res['height'] >= 1
+
+
+    def _test_hardfork_info(self):
+        print('Test hard_fork_info')
+
+        daemon = Daemon()
+        res = daemon.hard_fork_info()
+
+        # hard_fork version should be set at height 1
+        assert 'earliest_height' in res.keys()
+        assert res['earliest_height'] == 1;
+
+
+    def _test_generateblocks(self, blocks):
+        print("Test generating", blocks, 'blocks')
+
+        daemon = Daemon()
+        res = daemon.get_info()
+        height = res['height']
+        res = daemon.generateblocks('42ey1afDFnn4886T7196doS9GPMzexD9gXpsZJDwVjeRVdFCSoHnv7KPbBeGpzJBzHRCAs9UxqeoyFQMYbqSWYTfJJQAWDm', blocks)
+
+        assert res['height'] == height + blocks - 1
+
+
+if __name__ == '__main__':
+    BlockchainTest().run_test()
diff --git a/tests/functional_tests/speed.py b/tests/functional_tests/speed.py
new file mode 100755
index 000000000..3d2af9a10
--- /dev/null
+++ b/tests/functional_tests/speed.py
@@ -0,0 +1,87 @@
+#!/usr/bin/env python3
+
+# Copyright (c) 2018 The Monero Project
+# 
+# All rights reserved.
+# 
+# Redistribution and use in source and binary forms, with or without modification, are
+# permitted provided that the following conditions are met:
+# 
+# 1. Redistributions of source code must retain the above copyright notice, this list of
+#    conditions and the following disclaimer.
+# 
+# 2. Redistributions in binary form must reproduce the above copyright notice, this list
+#    of conditions and the following disclaimer in the documentation and/or other
+#    materials provided with the distribution.
+# 
+# 3. Neither the name of the copyright holder nor the names of its contributors may be
+#    used to endorse or promote products derived from this software without specific
+#    prior written permission.
+# 
+# THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY
+# EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
+# MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL
+# THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+# SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
+# PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS
+# INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+# STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
+# THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+"""Test speed of various procedures
+
+Test the following RPCs:
+    - generateblocks
+    - transfer
+    - [TODO: many tests still need to be written]
+
+"""
+
+
+import time
+from time import sleep
+from decimal import Decimal
+
+from test_framework.daemon import Daemon
+from test_framework.wallet import Wallet
+
+
+class SpeedTest():
+    def set_test_params(self):
+        self.num_nodes = 1
+
+    def run_test(self):
+        daemon = Daemon()
+        wallet = Wallet()
+
+        destinations = wallet.make_uniform_destinations('44AFFq5kSiGBoZ4NMDwYtN18obc8AemS33DBLWs3H7otXft3XjrpDtQGv7SqSsaBYBb98uNbr2VBBEt7f2wfn3RVGQBEP3A',1,3)
+
+        self._test_speed_generateblocks(daemon=daemon, blocks=70)
+        for i in range(1, 10):
+            while wallet.get_balance()['unlocked_balance'] == 0:
+                print('Waiting for wallet to refresh...')
+                sleep(1)
+            self._test_speed_transfer_split(wallet=wallet)
+        self._test_speed_generateblocks(daemon=daemon, blocks=10)
+
+    def _test_speed_generateblocks(self, daemon, blocks):
+        print('Test speed of block generation')
+        start = time.time()
+
+        res = daemon.generateblocks('42ey1afDFnn4886T7196doS9GPMzexD9gXpsZJDwVjeRVdFCSoHnv7KPbBeGpzJBzHRCAs9UxqeoyFQMYbqSWYTfJJQAWDm', blocks)
+            # wallet seed: velvet lymph giddy number token physics poetry unquoted nibs useful sabotage limits benches lifestyle eden nitrogen anvil fewest avoid batch vials washing fences goat unquoted
+
+        print('generating ', blocks, 'blocks took: ', time.time() - start, 'seconds')
+
+    def _test_speed_transfer_split(self, wallet):
+        print('Test speed of transfer')
+        start = time.time()
+
+        destinations = wallet.make_uniform_destinations('44AFFq5kSiGBoZ4NMDwYtN18obc8AemS33DBLWs3H7otXft3XjrpDtQGv7SqSsaBYBb98uNbr2VBBEt7f2wfn3RVGQBEP3A',1)
+        res = wallet.transfer_split(destinations)
+
+        print('generating tx took: ', time.time() - start, 'seconds')
+
+
+if __name__ == '__main__':
+    SpeedTest().run_test()
diff --git a/tests/functional_tests/test_framework/__init__.py b/tests/functional_tests/test_framework/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/functional_tests/test_framework/daemon.py b/tests/functional_tests/test_framework/daemon.py
new file mode 100644
index 000000000..f3490b232
--- /dev/null
+++ b/tests/functional_tests/test_framework/daemon.py
@@ -0,0 +1,105 @@
+# Copyright (c) 2018 The Monero Project
+# 
+# All rights reserved.
+# 
+# Redistribution and use in source and binary forms, with or without modification, are
+# permitted provided that the following conditions are met:
+# 
+# 1. Redistributions of source code must retain the above copyright notice, this list of
+#    conditions and the following disclaimer.
+# 
+# 2. Redistributions in binary form must reproduce the above copyright notice, this list
+#    of conditions and the following disclaimer in the documentation and/or other
+#    materials provided with the distribution.
+# 
+# 3. Neither the name of the copyright holder nor the names of its contributors may be
+#    used to endorse or promote products derived from this software without specific
+#    prior written permission.
+# 
+# THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY
+# EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
+# MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL
+# THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+# SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
+# PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS
+# INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+# STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
+# THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+"""Daemon class to make rpc calls and store state."""
+
+from .rpc import JSONRPC 
+
+class Daemon(object):
+
+    def __init__(self, protocol='http', host='127.0.0.1', port=18081, path='/json_rpc'):
+        self.rpc = JSONRPC('{protocol}://{host}:{port}{path}'.format(protocol=protocol, host=host, port=port, path=path))
+
+    def getblocktemplate(self, address):
+        getblocktemplate = {
+            'method': 'getblocktemplate',
+            'params': {
+                'wallet_address': address,
+                'reserve_size' : 1
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(getblocktemplate)
+
+    def submitblock(self, block):
+        submitblock = {
+            'method': 'submitblock',
+            'params': [ block ],    
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }    
+        return self.rpc.send_request(submitblock)
+
+    def getblock(self, height=0):
+        getblock = {
+            'method': 'getblock',
+            'params': {
+                'height': height
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(getblock)
+
+    def get_connections(self):
+        get_connections = {
+            'method': 'get_connections',
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(get_connections)
+
+    def get_info(self):
+        get_info = {
+                'method': 'get_info',
+                'jsonrpc': '2.0', 
+                'id': '0'
+        }    
+        return self.rpc.send_request(get_info)    
+
+    def hard_fork_info(self):
+        hard_fork_info = {
+                'method': 'hard_fork_info',
+                'jsonrpc': '2.0', 
+                'id': '0'
+        }    
+        return self.rpc.send_request(hard_fork_info)    
+
+    def generateblocks(self, address, blocks=1):
+        generateblocks = {
+            'method': 'generateblocks',
+            'params': {
+                'amount_of_blocks' : blocks,
+                'reserve_size' : 20,
+                'wallet_address': address
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(generateblocks)
diff --git a/tests/functional_tests/test_framework/rpc.py b/tests/functional_tests/test_framework/rpc.py
new file mode 100644
index 000000000..b21df7b93
--- /dev/null
+++ b/tests/functional_tests/test_framework/rpc.py
@@ -0,0 +1,49 @@
+# Copyright (c) 2018 The Monero Project
+# 
+# All rights reserved.
+# 
+# Redistribution and use in source and binary forms, with or without modification, are
+# permitted provided that the following conditions are met:
+# 
+# 1. Redistributions of source code must retain the above copyright notice, this list of
+#    conditions and the following disclaimer.
+# 
+# 2. Redistributions in binary form must reproduce the above copyright notice, this list
+#    of conditions and the following disclaimer in the documentation and/or other
+#    materials provided with the distribution.
+# 
+# 3. Neither the name of the copyright holder nor the names of its contributors may be
+#    used to endorse or promote products derived from this software without specific
+#    prior written permission.
+# 
+# THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY
+# EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
+# MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL
+# THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+# SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
+# PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS
+# INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+# STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
+# THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+import requests
+import json
+
+class JSONRPC(object):
+    def __init__(self, url):
+        self.url = url
+
+    def send_request(self, inputs):
+        res = requests.post(
+            self.url,
+            data=json.dumps(inputs),
+            headers={'content-type': 'application/json'})
+        res = res.json()
+        
+        assert 'error' not in res, res
+
+        return res['result']
+
+
+
+
diff --git a/tests/functional_tests/test_framework/wallet.py b/tests/functional_tests/test_framework/wallet.py
new file mode 100644
index 000000000..357eab5b2
--- /dev/null
+++ b/tests/functional_tests/test_framework/wallet.py
@@ -0,0 +1,120 @@
+# Copyright (c) 2018 The Monero Project
+# 
+# All rights reserved.
+# 
+# Redistribution and use in source and binary forms, with or without modification, are
+# permitted provided that the following conditions are met:
+# 
+# 1. Redistributions of source code must retain the above copyright notice, this list of
+#    conditions and the following disclaimer.
+# 
+# 2. Redistributions in binary form must reproduce the above copyright notice, this list
+#    of conditions and the following disclaimer in the documentation and/or other
+#    materials provided with the distribution.
+# 
+# 3. Neither the name of the copyright holder nor the names of its contributors may be
+#    used to endorse or promote products derived from this software without specific
+#    prior written permission.
+# 
+# THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" AND ANY
+# EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
+# MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL
+# THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL,
+# SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
+# PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS
+# INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT,
+# STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
+# THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
+
+"""Daemon class to make rpc calls and store state."""
+
+from .rpc import JSONRPC 
+
+class Wallet(object):
+
+    def __init__(self, protocol='http', host='127.0.0.1', port=18083, path='/json_rpc'):
+        self.rpc = JSONRPC('{protocol}://{host}:{port}{path}'.format(protocol=protocol, host=host, port=port, path=path))
+
+    def make_uniform_destinations(self, address, transfer_amount, transfer_number_of_destinations=1):
+        destinations = []
+        for i in range(transfer_number_of_destinations):
+            destinations.append({"amount":transfer_amount,"address":address})
+        return destinations
+
+    def make_destinations(self, addresses, transfer_amounts):
+        destinations = []
+        for i in range(len(addresses)):
+            destinations.append({'amount':transfer_amounts[i],'address':addresses[i]})
+        return destinations
+
+    def transfer(self, destinations, ringsize=7, payment_id=''):
+        transfer = {
+            'method': 'transfer',
+            'params': {
+                'destinations': destinations,
+                'mixin' : ringsize - 1,
+                'get_tx_key' : True
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'    
+        }
+        if(len(payment_id) > 0):
+            transfer['params'].update({'payment_id' : payment_id})
+        return self.rpc.send_request(transfer)   
+
+    def transfer_split(self, destinations, ringsize=7, payment_id=''):
+        print(destinations)
+        transfer = {
+            "method": "transfer_split",
+            "params": {
+                "destinations": destinations,
+                "mixin" : ringsize - 1,
+                "get_tx_key" : True,
+                "new_algorithm" : True
+            },
+            "jsonrpc": "2.0", 
+            "id": "0"    
+        }
+        if(len(payment_id) > 0):
+            transfer['params'].update({'payment_id' : payment_id})
+        return self.rpc.send_request(transfer)   
+
+    def create_wallet(self, index=''):
+        create_wallet = {
+            'method': 'create_wallet',
+            'params': {
+                'filename': 'testWallet' + index,
+                'password' : '',
+                'language' : 'English'
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(create_wallet)
+
+    def get_balance(self):
+        get_balance = {
+            'method': 'get_balance',
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(get_balance)
+
+    def sweep_dust(self):
+        sweep_dust = {
+            'method': 'sweep_dust',
+            'jsonrpc': '2.0', 
+            'id': '0'   
+        }
+        return self.rpc.send_request(sweep_dust)
+
+    def sweep_all(self, address):
+        sweep_all = {
+            'method': 'sweep_all',
+            'params' : {
+                'address' : ''
+            },
+            'jsonrpc': '2.0', 
+            'id': '0'
+        }
+        return self.rpc.send_request(sweep_all)