diff --git a/Cargo.lock b/Cargo.lock
index 5572d159..ea906aef 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -2,6 +2,36 @@
 # It is not intended for manual editing.
 version = 3
 
+[[package]]
+name = "addr2line"
+version = "0.17.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "b9ecd88a8c8378ca913a680cd98f0f13ac67383d35993f86c90a70e3f137816b"
+dependencies = [
+ "gimli",
+]
+
+[[package]]
+name = "adler"
+version = "1.0.2"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "f26201604c87b1e01bd3d98f8d5d9a8fcbb815e8cedb41ffccbeb4bf593a35fe"
+
+[[package]]
+name = "backtrace"
+version = "0.3.66"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "cab84319d616cfb654d03394f38ab7e6f0919e181b1b57e1fd15e7fb4077d9a7"
+dependencies = [
+ "addr2line",
+ "cc",
+ "cfg-if",
+ "libc",
+ "miniz_oxide",
+ "object",
+ "rustc-demangle",
+]
+
 [[package]]
 name = "bech32"
 version = "0.8.1"
@@ -87,6 +117,12 @@ dependencies = [
  "wasi",
 ]
 
+[[package]]
+name = "gimli"
+version = "0.26.2"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "22030e2c5a68ec659fde1e949a745124b48e6fa8b045b7ed5bd1fe4ccc5c4e5d"
+
 [[package]]
 name = "itoa"
 version = "1.0.2"
@@ -108,10 +144,17 @@ dependencies = [
  "cfg-if",
 ]
 
+[[package]]
+name = "memchr"
+version = "2.5.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "2dffe52ecf27772e601905b7522cb4ef790d2cc203488bbd0e2fe85fcb74566d"
+
 [[package]]
 name = "minisafed"
 version = "0.0.1"
 dependencies = [
+ "backtrace",
  "dirs",
  "fern",
  "log",
@@ -131,6 +174,24 @@ dependencies = [
  "serde",
 ]
 
+[[package]]
+name = "miniz_oxide"
+version = "0.5.3"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "6f5c75688da582b8ffc1f1799e9db273f32133c49e048f614d22ec3256773ccc"
+dependencies = [
+ "adler",
+]
+
+[[package]]
+name = "object"
+version = "0.29.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "21158b2c33aa6d4561f1c0a6ea283ca92bc54802a93b263e910746d679a7eb53"
+dependencies = [
+ "memchr",
+]
+
 [[package]]
 name = "proc-macro2"
 version = "1.0.40"
@@ -169,6 +230,12 @@ dependencies = [
  "thiserror",
 ]
 
+[[package]]
+name = "rustc-demangle"
+version = "0.1.21"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "7ef03e0a2b150c7a90d01faf6254c9c48a41e95fb2a8c2ac1c6f0d2b9aefc342"
+
 [[package]]
 name = "ryu"
 version = "1.0.10"
diff --git a/Cargo.toml b/Cargo.toml
index 642ed265..09bf554b 100644
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -32,3 +32,8 @@ serde_json = { version = "1.0", features = ["raw_value"] }
 # Logging stuff
 log = "0.4"
 fern = "0.6"
+
+# In order to have a backtrace on panic, because the
+# stdlib does not have a programmatic interface yet
+# to work with our custom panic hook.
+backtrace = "0.3"
diff --git a/src/bin/daemon.rs b/src/bin/daemon.rs
index 26e34670..ae0b31b1 100644
--- a/src/bin/daemon.rs
+++ b/src/bin/daemon.rs
@@ -5,7 +5,7 @@ use std::{
     process, time,
 };
 
-use minisafed::config::Config;
+use minisafed::{config::Config, DaemonHandle};
 
 fn parse_args(args: Vec<String>) -> Option<PathBuf> {
     if args.len() == 1 {
@@ -58,6 +58,11 @@ fn main() {
         process::exit(1);
     });
 
+    let _ = DaemonHandle::start(config).unwrap_or_else(|e| {
+        // The panic hook will log::error
+        panic!("Starting Minisafe daemon: {}", e);
+    });
+
     // We are always logging to stdout, should it be then piped to the log file (if self) or
     // not. So just make sure that all messages were actually written.
     io::stdout().flush().expect("Flushing stdout");
diff --git a/src/lib.rs b/src/lib.rs
index ef68c369..693b74a9 100644
--- a/src/lib.rs
+++ b/src/lib.rs
@@ -1 +1,116 @@
 pub mod config;
+
+use crate::config::{config_folder_path, Config};
+
+use std::{error, fmt, fs, io, panic, path, process};
+
+// A panic in any thread should stop the main thread, and print the panic.
+fn setup_panic_hook() {
+    panic::set_hook(Box::new(move |panic_info| {
+        let file = panic_info
+            .location()
+            .map(|l| l.file())
+            .unwrap_or_else(|| "'unknown'");
+        let line = panic_info
+            .location()
+            .map(|l| l.line().to_string())
+            .unwrap_or_else(|| "'unknown'".to_string());
+
+        let bt = backtrace::Backtrace::new();
+        let info = panic_info
+            .payload()
+            .downcast_ref::<&str>()
+            .map(|s| s.to_string())
+            .or_else(|| panic_info.payload().downcast_ref::<String>().cloned());
+        log::error!(
+            "panic occurred at line {} of file {}: {:?}\n{:?}",
+            line,
+            file,
+            info,
+            bt
+        );
+
+        process::exit(1);
+    }));
+}
+
+#[derive(Debug)]
+pub enum StartupError {
+    Io(io::Error),
+    DefaultDataDirNotFound,
+    DatadirCreation(path::PathBuf, io::Error),
+}
+
+impl fmt::Display for StartupError {
+    fn fmt(&self, f: &mut fmt::Formatter) -> fmt::Result {
+        match self {
+            Self::Io(e) => write!(f, "{}", e),
+            Self::DefaultDataDirNotFound => write!(
+                f,
+                "Not data directory was specified and a default path could not be determined for this platform."
+            ),
+            Self::DatadirCreation(dir_path, e) => write!(
+                f,
+                "Could not create data directory at '{}': '{}'", dir_path.display(), e
+            ),
+        }
+    }
+}
+
+impl error::Error for StartupError {}
+
+impl From<io::Error> for StartupError {
+    fn from(e: io::Error) -> Self {
+        Self::Io(e)
+    }
+}
+
+fn create_datadir(datadir_path: &path::Path) -> Result<(), StartupError> {
+    #[cfg(unix)]
+    return {
+        use fs::DirBuilder;
+        use std::os::unix::fs::DirBuilderExt;
+
+        let mut builder = DirBuilder::new();
+        builder
+            .mode(0o700)
+            .recursive(true)
+            .create(datadir_path)
+            .map_err(|e| StartupError::DatadirCreation(datadir_path.to_path_buf(), e))
+    };
+
+    // TODO: permissions on Windows..
+    #[cfg(not(unix))]
+    return {
+        fs::create_dir_all(datadir_path)
+            .map_err(|e| StartupError::DatadirCreation(datadir_path.to_path_buf(), e))
+    };
+}
+
+pub struct DaemonHandle {}
+
+impl DaemonHandle {
+    /// This starts the Minisafe daemon. Call `shutdown` to shut it down.
+    ///
+    /// **Note**: we internally use threads, and set a panic hook. A downstream application must
+    /// not overwrite this panic hook.
+    pub fn start(config: Config) -> Result<Self, StartupError> {
+        setup_panic_hook();
+
+        // First, check the data directory
+        let mut data_dir = config
+            .data_dir
+            .unwrap_or(config_folder_path().ok_or(StartupError::DefaultDataDirNotFound)?);
+        data_dir.push(config.bitcoind_config.network.to_string());
+        if !data_dir.as_path().exists() {
+            create_datadir(&data_dir)?;
+            log::info!("Created a new data directory at '{}'", data_dir.display());
+        }
+
+        Ok(Self {})
+    }
+
+    // NOTE: this moves out the data as it should not be reused after shutdown
+    /// Shut down the Minisafe daemon.
+    pub fn shutdown(self) {}
+}