diff --git a/tests/unit/test_headers.py b/tests/unit/test_headers.py
index 00f628c16..92654bde5 100644
--- a/tests/unit/test_headers.py
+++ b/tests/unit/test_headers.py
@@ -27,9 +27,12 @@ class BitcoinHeadersTestCase(unittest.TestCase):
             req.add_header('Range', 'bytes=0-{}'.format(self.HEADER_BYTES-1))
             with urlopen(req) as response, open(self.header_file_name, 'wb') as header_file:
                 header_file.write(response.read())
-            if os.path.getsize(self.header_file_name) != self.HEADER_BYTES:
-                os.remove(self.header_file_name)
-                raise Exception("Downloaded headers for testing are not the correct number of bytes.")
+        if os.path.getsize(self.header_file_name) != self.HEADER_BYTES:
+            os.remove(self.header_file_name)
+            raise Exception(
+                "Downloaded headers for testing are not the correct number of bytes. "
+                "They were deleted. Try running the tests again."
+            )
 
     def get_bytes(self, upto: int = -1, after: int = 0) -> bytes:
         with open(self.header_file_name, 'rb') as headers:
diff --git a/torba/basedatabase.py b/torba/basedatabase.py
index 6f0572553..7af731f12 100644
--- a/torba/basedatabase.py
+++ b/torba/basedatabase.py
@@ -241,6 +241,12 @@ class BaseDatabase(SQLiteMixin):
     def release_outputs(self, txos):
         return self.reserve_outputs(txos, is_reserved=False)
 
+    def rewind_blockchain(self, above_height):
+        # TODO:
+        # 1. delete transactions above_height
+        # 2. update address histories removing deleted TXs
+        return defer.succeed(True)
+
     @defer.inlineCallbacks
     def get_transaction(self, txid):
         result = yield self.run_query(
diff --git a/torba/baseheader.py b/torba/baseheader.py
index 442407c84..75be3c52e 100644
--- a/torba/baseheader.py
+++ b/torba/baseheader.py
@@ -6,7 +6,6 @@ from binascii import hexlify
 
 from twisted.internet import threads, defer
 
-from torba.stream import StreamController
 from torba.util import ArithUint256
 from torba.hash import double_sha256
 
@@ -37,8 +36,6 @@ class BaseHeaders:
             self.io = BytesIO()
         self.path = path
         self._size: Optional[int] = None
-        self._on_change_controller = StreamController()
-        self.on_changed = self._on_change_controller.stream
         self._header_connect_lock = defer.DeferredLock()
 
     def open(self):
@@ -106,7 +103,7 @@ class BaseHeaders:
         try:
             for height, chunk in self._iterate_chunks(start, headers):
                 try:
-                    # validate_chunk() is CPU bound on large chunks
+                    # validate_chunk() is CPU bound and reads previous chunks from file system
                     yield threads.deferToThread(self.validate_chunk, height, chunk)
                 except InvalidHeader as e:
                     bail = True
@@ -120,7 +117,6 @@ class BaseHeaders:
                     # the goal here is mainly to ensure we're definitely flush()'ing
                     yield threads.deferToThread(self.io.flush)
                     self._size = None
-                    self._on_change_controller.add(written)
                 added += written
                 if bail:
                     break
diff --git a/torba/baseledger.py b/torba/baseledger.py
index bde70f59c..560c9842d 100644
--- a/torba/baseledger.py
+++ b/torba/baseledger.py
@@ -44,6 +44,10 @@ class TransactionEvent(namedtuple('TransactionEvent', ('address', 'tx', 'height'
     pass
 
 
+class BlockHeightEvent(namedtuple('BlockHeightEvent', ('height', 'change'))):
+    pass
+
+
 class BaseLedger(metaclass=LedgerRegistry):
 
     name: str
@@ -235,36 +239,54 @@ class BaseLedger(metaclass=LedgerRegistry):
         yield self.headers.close()
 
     @defer.inlineCallbacks
-    def update_headers(self, height=None, headers=None, count=1, subscription_update=False):
+    def update_headers(self, height=None, headers=None, subscription_update=False):
         rewound = 0
         while True:
 
-            height = len(self.headers) if height is None else height
-            if headers is None:
+            if height is None or height > len(self.headers):
+                # sometimes header subscription updates are for a header in the future
+                # which can't be connected, so we do a normal header sync instead
+                height = len(self.headers)
+                headers = None
+                subscription_update = False
+
+            if not headers:
                 header_response = yield self.network.get_headers(height, 2001)
-                count = header_response['count']
                 headers = header_response['hex']
 
-            if count <= 0:
+            if not headers:
+                # Nothing to do, network thinks we're already at the latest height.
                 return
 
             added = yield self.headers.connect(height, unhexlify(headers))
             if added > 0:
-                self._on_header_controller.add(added)
+                height += added
+                self._on_header_controller.add(
+                    BlockHeightEvent(self.headers.height, added))
 
-            if subscription_update and added == count:
-                # subscription updates are for latest header already
-                # so we don't need to check if there are newer / more
-                return
+                if rewound > 0:
+                    # we started rewinding blocks and apparently found
+                    # a new chain
+                    rewound = 0
+                    yield self.db.rewind_blockchain(height)
 
-            if added == 0:
-                # headers were invalid, start rewinding
+                if subscription_update:
+                    # subscription updates are for latest header already
+                    # so we don't need to check if there are newer / more
+                    # on another loop of update_headers(), just return instead
+                    return
+
+            elif added == 0:
+                # we had headers to connect but none got connected, probably a reorganization
                 height -= 1
                 rewound += 1
-                log.warning("Experiencing Blockchain Reorganization: Undoing header.")
+                log.warning(
+                    "Blockchain Reorganization: attempting rewind to height {} from starting height {}"
+                    .format(height, height+rewound)
+                )
+
             else:
-                # added all headers, see if there are more
-                height += added
+                raise IndexError("headers.connect() returned negative number ({})".format(added))
 
             if height < 0:
                 raise IndexError(
@@ -272,17 +294,19 @@ class BaseLedger(metaclass=LedgerRegistry):
                     "Something is very wrong. Maybe you are on the wrong blockchain?"
                 )
 
-            if rewound >= 50:
+            if rewound >= 100:
                 raise IndexError(
                     "Blockchain reorganization dropped {} headers. This is highly unusual. "
-                    "Will not continue to attempt reorganizing."
-                    .format(rewound)
+                    "Will not continue to attempt reorganizing. Please, delete the ledger "
+                    "synchronization directory inside your wallet directory (folder: '{}') and "
+                    "restart the program to synchronize from scratch."
+                    .format(rewound, self.get_id())
                 )
 
-            headers = None
+            headers = None  # ready to download some more headers
 
             # if we made it this far and this was a subscription_update
-            # it means something was wrong and now we're doing a more
+            # it means something went wrong and now we're doing a more
             # robust sync, turn off subscription update shortcut
             subscription_update = False