diff --git a/src/main/java/org/qortal/network/Handshake.java b/src/main/java/org/qortal/network/Handshake.java
index 80a9a8b9..b8a72372 100644
--- a/src/main/java/org/qortal/network/Handshake.java
+++ b/src/main/java/org/qortal/network/Handshake.java
@@ -164,6 +164,11 @@ public enum Handshake {
 
 			peer.setPeersNodeId(Crypto.toNodeAddress(peersPublicKey));
 
+			// For inbound peers, we need to go into interim holding state while we compute RESPONSE
+			if (!peer.isOutbound())
+				return RESPONDING;
+
+			// Handshake completed!
 			return COMPLETED;
 		}
 
@@ -184,22 +189,42 @@ public enum Handshake {
 				Message responseMessage = new ResponseMessage(nonce, data);
 				if (!peer.sendMessage(responseMessage))
 					peer.disconnect("failed to send RESPONSE");
+
+				// For inbound peers, we should actually be in RESPONDING state.
+				// So we need to do the extra work to move to COMPLETED state.
+				if (!peer.isOutbound()) {
+					peer.setHandshakeStatus(COMPLETED);
+					Network.getInstance().onHandshakeCompleted(peer);
+				}
 			});
 
 			responseThread.setDaemon(true);
 			responseThread.start();
 		}
 	},
-	COMPLETED(null) {
+	// Interim holding state while we compute RESPONSE to send to inbound peer
+	RESPONDING(null) {
 		@Override
 		public Handshake onMessage(Peer peer, Message message) {
-			// Handshake completed
+			// Should never be called
 			return null;
 		}
 
 		@Override
 		public void action(Peer peer) {
-			// Note: this is only called when we've made outbound connection
+			// Should never be called
+		}
+	},
+	COMPLETED(null) {
+		@Override
+		public Handshake onMessage(Peer peer, Message message) {
+			// Should never be called
+			return null;
+		}
+
+		@Override
+		public void action(Peer peer) {
+			// Note: this is only called if we've made outbound connection
 		}
 	};
 
diff --git a/src/main/java/org/qortal/network/Network.java b/src/main/java/org/qortal/network/Network.java
index a04921b3..86e189b0 100644
--- a/src/main/java/org/qortal/network/Network.java
+++ b/src/main/java/org/qortal/network/Network.java
@@ -635,7 +635,7 @@ public class Network {
 
 	/** Called when Peer's thread has setup and is ready to process messages */
 	public void onPeerReady(Peer peer) {
-		this.onMessage(peer, null);
+		onHandshakingMessage(peer, null, Handshake.STARTED);
 	}
 
 	public void onDisconnect(Peer peer) {
@@ -777,7 +777,7 @@ public class Network {
 		opportunisticMergePeers(peer.toString(), peerV2Addresses);
 	}
 
-	private void onHandshakeCompleted(Peer peer) {
+	/*pacakge*/ void onHandshakeCompleted(Peer peer) {
 		LOGGER.debug(String.format("Handshake completed with peer %s", peer));
 
 		// Are we already connected to this peer?