diff --git a/docker/README.md b/docker/README.md
index 8b1378917..38a465450 100644
--- a/docker/README.md
+++ b/docker/README.md
@@ -1 +1,152 @@
+### Getting started
+This document is written for people who are eager to do something with 
+lightning network daemon (`lnd`). Current workflow is big because we 
+recreate the whole network by ourselves, next versions will use the 
+started `btcd` bitcoin node in `testnet` and `faucet` wallet from which 
+you will get the bitcoins.
 
+In current readme we decribe the steps which are needed to recreate 
+following schema, and send payment from `Alice` to `Bob`.
+```
++ ----- +                   + --- +
+| Alice | <--- channel ---> | Bob |  <---   Bob and Alice are the lightning network daemons which 
++ ----- +                   + --- +         creates the channel and interact with each other using   
+    |                          |            Bitcoin network as source of truth. 
+    |                          |            
+    + - - - -  - + - - - - - - +            
+                 |
+        + ---------------- +
+        | Bitcoin network  |  <---  In current scenario for simplicity we create only one  
+        + ---------------- +        "btcd" node which represents the Bitcoin network, in  
+                                    real situation Alice and Bob will likely be 
+                                    connected to different Bitcoin nodes.
+```
+
+#### Prerequisites
+    Name  | Version 
+  --------|---------
+  docker-compose | 1.9.0
+  docker | 1.13.0
+
+**General workflow is following:** 
+ * Create Bitcoin network
+ * Create `Alice` node
+ * Create `Bob` node
+ * Initialize `Alice` node with some amount of bitcoins
+ * Open channel between `Alice` and `Bob`
+ * Send payment from `Alice` to `Bob`
+
+Start the `btcd`, create `Alice` address and mine some bitcoins.
+```bash
+# Create "btcd" node:
+$ docker-compose up -d "btcd"
+
+# Run "Alice" container and log into it:
+$ docker-compose up -d "alice"
+$ docker exec -i -t "alice" bash
+
+# Generate new backward compatible "segwit" "alice" address:
+alice$ lncli newaddress np2wkh 
+
+# Recreate "btcd" node and set "alice" address as mining address:
+$ MINING_ADDRESS=<alice_address> docker-compose up -d "btcd"
+
+# Generate 201 block (we need at least "100 >=" blocks because of coinbase 
+# block maturity and "250 >=" in order to activate segwit):
+$ docker-compose run btcctl generate 250
+
+# Check that segwit is active:
+$ docker-compose run btcctl getblockchaininfo | grep -A 1 segwit
+```
+
+Now we have `btcd` node turned on and some amount of bitcoins mined on 
+`Alice` address. But in order `lnd` saw them lets restart the `lnd` 
+daemon.
+```bash
+# Stop "Alice" container:
+$ docker-compose stop "alice"
+
+# Start "Alice" container and log into it:
+$ docker-compose up --no-recreate -d "alice"
+$ docker exec -i -t "alice" bash
+
+# Check "Alice" balance:
+alice$ lncli walletbalance --witness_only=true
+```
+
+Connect `Bob` node to `Alice` node.
+```bash
+# Run "Bob" node and log into it:
+$ docker-compose up --no-recreate -d "bob"
+$ docker exec -i -t "bob" bash
+
+# Get the identity address of "Bob" node:
+bob$ lncli getinfo
+
+# Get the IP address of "Bob" node:
+$ docker inspect "bob" | grep IPAddress
+
+# Connect "Alice" to the "Bob" node:
+alice$ lncli connect <bob_identity_address>@<bob_host>:10011
+
+# Check list of peers on "Alice" side:
+alice$ lncli listpeers
+
+# Check list of peers on "Bob" side:
+bob$ lncli listpeers
+```
+
+Create `Alice<->Bob` channel.
+```bash
+# Open the channel with "Bob":
+alice$ lncli openchannel --node_key=<bob_lightning_id> --num_confs=1 --local_amt=1000000 --push_amt=0
+
+# Include funding transaction in block thereby open the channel:
+$ docker-compose run btcctl generate 1
+
+# Check that channel with "Bob" was created:
+alice$ lncli listchannels
+```
+
+Send the payment form "Alice" to "Bob".
+```
+# Add invoice on "Bob" side:
+bob> lncli addinvoice --value=10000
+
+# Send payment from "Alice" to "Bob":
+alice> lncli sendpayment --pay_req=<encoded_invoice>
+
+# Check "Alice" channel balance was descreased on sent amount:
+alice> lncli listchannels
+
+# Check "Bob" channel balance was increased on sent amount:
+bob> lncli listchannels
+```
+
+Now we have open channel in which we sent only one payment, lets imagine
+that we sent a lots of them and we ok to close channel. Lets do it.
+```
+# List the "Alice" channel and retrieve "channel_point" which represent
+# the opened channel:
+alice> lncli listchannels
+
+# Channel point consist of two numbers devided by ":" the first on is 
+# "funding_txid" and the second one is "output_index":
+alice> lncli closechannel --funding_txid=<funding_txid> --output_index=<output_index>
+
+# Include close transaction in block thereby close the channel:
+$ docker-compose run btcctl generate 1
+
+# Check "Alice" on-chain balance was descresed on sent amount:
+alice> lncli walletbalance
+
+# Check "Bob" on-chain balance was increased on sent amount:
+bob> lncli walletbalance
+```
+
+
+### Questions
+* How to see `alice` | `bob` | `btcd` logs?
+```
+docker-compose logs <alice|bob|btcd> 
+```
\ No newline at end of file
diff --git a/docker/btcd/Dockerfile b/docker/btcd/Dockerfile
index 9c6c9ec50..6dc991f94 100644
--- a/docker/btcd/Dockerfile
+++ b/docker/btcd/Dockerfile
@@ -2,27 +2,36 @@ FROM golang:1.7
 
 MAINTAINER Olaoluwa Osuntokun <laolu@lightning.network>
 
+# Expose mainnet ports (server, rpc)
+EXPOSE 8333 8334
+
+# Expose testnet ports (server, rpc)
+EXPOSE 18333 18334
+
+# Expose simnet ports (server, rpc)
+EXPOSE 18555 18556
+
+# Expose segnet ports (server, rpc)
+EXPOSE 28901 28902
+
 # Grab and install the latest version of roasbeef's fork of btcd and all
 # related dependencies.
 RUN go get -u -v github.com/roasbeef/btcd/...
 
-# Expose the mainnet, testnet, simnet, and segnet listening ports.
-EXPOSE 8333 18333 18335 28901
+RUN mkdir "/rpc" "/root/.btcd" "/root/.btcctl"
+RUN touch "/root/.btcd/btcd.conf"
 
-# Expose the mainnet, testnet, simnet, and segnet rpc ports.
-EXPOSE 8333 18333 18336 28902
+# Manually generate certificate and add all domains, it is needed to connect
+# "btcctl" and "lnd" to "btcd" over docker links.
+RUN "/go/bin/gencerts" --host="*" --directory="/rpc" --force
 
-# Create a volume to house the RPC credentials. This will be shared with any
-# lnd containers so they can securely query btcd's RPC server.
+# Create a volume to house pregenerated RPC credentials. This will be
+# shared with any lnd, btcctl containers so they can securely query btcd's RPC
+# server.
+# You should NOT do this before certificate generation!
+# Otherwise manually generated certificate will be overriden with shared
+# mounted volume! For more info read dockerfile "VOLUME" documentation.
 VOLUME ["/rpc"]
 
-VOLUME ["/data"]
-
-RUN mkdir /root/.btcd && mkdir /root/.btcctl
-
-COPY btcd-start.sh /
-
-# Finally, execute the shell script that will start btcd. We use a shell script
-# rather than executing the command directly with ENTRYPOINT in order to ensure
-# environment variables get properly substitued.
-ENTRYPOINT ["/btcd-start.sh"]
+COPY "start-btcctl.sh" .
+COPY "start-btcd.sh" .
diff --git a/docker/btcd/btcd-start.sh b/docker/btcd/btcd-start.sh
deleted file mode 100755
index 04334c9fe..000000000
--- a/docker/btcd/btcd-start.sh
+++ /dev/null
@@ -1,7 +0,0 @@
-#!/bin/bash
-
-
-/go/bin/btcd --datadir=/data --logdir=/data --simnet  \
-             --rpccert=/rpc/rpc.cert --rpckey=/rpc/rpc.key  \
-             --rpcuser=${RPCUSER} --rpcpass=${RPCPASS} --rpclisten=0.0.0.0 \
-             --debuglevel=debug
diff --git a/docker/btcd/start-btcctl.sh b/docker/btcd/start-btcctl.sh
new file mode 100755
index 000000000..761ee3491
--- /dev/null
+++ b/docker/btcd/start-btcctl.sh
@@ -0,0 +1,37 @@
+#!/usr/bin/env bash
+
+# Check env variable and in case of empty value and default value specified
+# returns default value, in case of non-empty value returns value.
+set_env() {
+    # docker initialized env variables with blank string and we can't just
+    # use -z flag as usually.
+    BLANK_STRING='""'
+
+    VARIABLE="$1"
+    NAME="$2"
+    DEFAULT="$3"
+
+    if [[ -z "$VARIABLE" || "$VARIABLE" == "$BLANK_STRING" ]]; then
+
+        if [ -z "$DEFAULT" ]; then
+            echo "You should specify '$NAME' env variable"
+            exit 0
+        else
+            VARIABLE="$DEFAULT"
+        fi
+    fi
+
+    # echo is used as return in case if string values
+    echo "$VARIABLE"
+}
+
+RPCUSER=$(set_env "$RPCUSER" "RPCUSER")
+RPCPASS=$(set_env "$RPCPASS" "RPCPASS")
+
+btcctl \
+    --simnet \
+    --rpccert="/rpc/rpc.cert" \
+    --rpcuser="$RPCUSER" \
+    --rpcpass="$RPCPASS" \
+    --rpcserver="rpcserver" \
+    "$@"
diff --git a/docker/btcd/start-btcd.sh b/docker/btcd/start-btcd.sh
new file mode 100755
index 000000000..a513ba6f5
--- /dev/null
+++ b/docker/btcd/start-btcd.sh
@@ -0,0 +1,47 @@
+#!/usr/bin/env bash
+
+# Check env variable and in case of empty value and default value specified
+# returns default value, in case of non-empty value returns value.
+set_env() {
+    # docker initialized env variables with blank string and we can't just
+    # use -z flag as usually.
+    BLANK_STRING='""'
+
+    VARIABLE="$1"
+    NAME="$2"
+    DEFAULT="$3"
+
+    if [[ -z "$VARIABLE" || "$VARIABLE" == "$BLANK_STRING" ]]; then
+
+        if [ -z "$DEFAULT" ]; then
+            echo "You should specify '$NAME' env variable"
+            exit 0
+        else
+            VARIABLE="$DEFAULT"
+        fi
+    fi
+
+    # echo is used as return in case if string values
+    echo "$VARIABLE"
+}
+
+RPCUSER=$(set_env "$RPCUSER" "RPCUSER")
+RPCPASS=$(set_env "$RPCPASS" "RPCPASS")
+
+DEBUG=$(set_env "$DEBUG" "DEBUG")
+
+MINING_ADDRESS=$(set_env "$MINING_ADDRESS" "MINING_ADDRESS" "ScoDuqH7kYA9nvxuRg4Xk7E31AhsSc5zxp")
+
+btcd \
+    --debuglevel="$DEBUG" \
+    --datadir="/data" \
+    --logdir="/data" \
+    --simnet \
+    --rpccert="/rpc/rpc.cert" \
+    --rpckey="/rpc/rpc.key" \
+    --rpcuser="$RPCUSER" \
+    --rpcpass="$RPCPASS" \
+    --miningaddr="$MINING_ADDRESS" \
+    --rpclisten="0.0.0.0" \
+    "$@"
+
diff --git a/docker/docker-compose.yml b/docker/docker-compose.yml
index eb62f9e09..310d20acb 100644
--- a/docker/docker-compose.yml
+++ b/docker/docker-compose.yml
@@ -1,28 +1,56 @@
 version: '2'
 services:
+
+    btc:
+      image: btcd
+      build:
+        context: btcd/
+      volumes:
+            - shared:/rpc
+      environment:
+        - RPCUSER="devuser"
+        - RPCPASS="devpass"
+
     btcd:
+        extends: btc
+        container_name: btcd
         environment:
-            - RPCUSER=devuser
-            - RPCPASS=devpass
-        build: 
-            context: btcd/
-        expose:
-            - "18336"
-        volumes:
-            - shared-volume:/rpc
-    lnd:
-        environment:
-            - RPCUSER=devuser
-            - RPCPASS=devpass
-        build: 
-            context: ../
-            dockerfile: docker/lnd/Dockerfile
-        expose:
-            - "10009"
-            - "10011"
-        volumes:
-            - shared-volume:/rpc
+          - DEBUG="debug"
+          - MINING_ADDRESS
+        entrypoint: ["./start-btcd.sh"]
+
+    btcctl:
+        extends: btc
+        container_name: btcctl
         links:
+            - "btcd:rpcserver"
+        entrypoint: ["./start-btcctl.sh"]
+
+    lnd:
+        image: lnd
+        build:
+          context: ../
+          dockerfile: docker/lnd/Dockerfile
+        environment:
+          - RPCUSER="devuser"
+          - RPCPASS="devpass"
+          - DEBUG="debug"
+        volumes:
+            - shared:/rpc
+        entrypoint: ["./start-lnd.sh"]
+
+    alice:
+      extends: lnd
+      container_name: alice
+      links:
             - btcd
+
+    bob:
+      extends: lnd
+      container_name: bob
+      links:
+            - btcd
+
 volumes:
-  shared-volume: {}
+  shared:
+    driver: local
diff --git a/docker/lnd/Dockerfile b/docker/lnd/Dockerfile
index bb4effa1e..3907fbad3 100644
--- a/docker/lnd/Dockerfile
+++ b/docker/lnd/Dockerfile
@@ -13,18 +13,7 @@ ENV GODEBUG netdns=cgo
 RUN go build
 RUN go install . ./cmd/...
 
-# Mount a volume where btcd's RPC credentials are stored. We'll need to read
-# the TLS cert from this directory.
-VOLUME ["/rpc"]
+# Expose lnd ports (server, rpc).
+EXPOSE 10011 10009
 
-VOLUME ["/data"]
-
-# Expose the p2p listening port, and the current RPC port.
-EXPOSE 10009 10011
-
-COPY docker/lnd/lnd-start.sh /
-
-# Finally, execute the shell script that will start lnd. We use a shell script
-# rather than executing the command directly with ENTRYPOINT in order to ensure
-# environment variables get properly substitued.
-ENTRYPOINT ["/lnd-start.sh"]
+COPY "docker/lnd/start-lnd.sh" .
diff --git a/docker/lnd/lnd-start.sh b/docker/lnd/lnd-start.sh
deleted file mode 100755
index c5465fa6d..000000000
--- a/docker/lnd/lnd-start.sh
+++ /dev/null
@@ -1,5 +0,0 @@
-#!/bin/bash
-
-/go/bin/lnd --datadir=/data --logdir=/data --simnet  \
-            --btcdhost=btcd --rpccert=/rpc/rpc.cert  \
-            --rpcuser=${RPCUSER} --rpcpass=${RPCPASS} --debuglevel=debug
diff --git a/docker/lnd/start-lnd.sh b/docker/lnd/start-lnd.sh
new file mode 100755
index 000000000..02385a765
--- /dev/null
+++ b/docker/lnd/start-lnd.sh
@@ -0,0 +1,42 @@
+#!/usr/bin/env bash
+
+# Check env variable and in case of empty value and default value specified
+# returns default value, in case of non-empty value returns value.
+set_env() {
+    # docker initialized env variables with blank string and we can't just
+    # use -z flag as usually.
+    BLANK_STRING='""'
+
+    VARIABLE="$1"
+    NAME="$2"
+    DEFAULT="$3"
+
+    if [[ -z "$VARIABLE" || "$VARIABLE" == "$BLANK_STRING" ]]; then
+
+        if [ -z "$DEFAULT" ]; then
+            echo "You should specify '$NAME' env variable"
+            exit 0
+        else
+            VARIABLE="$DEFAULT"
+        fi
+    fi
+
+    # echo is used as return in case if string values
+    echo "$VARIABLE"
+}
+
+RPCUSER=$(set_env "$RPCUSER" "RPCUSER")
+RPCPASS=$(set_env "$RPCPASS" "RPCPASS")
+
+DEBUG=$(set_env "$DEBUG" "DEBUG")
+
+lnd \
+    --datadir="/data" \
+    --logdir="/data" \
+    --simnet \
+    --btcdhost="btcd" \
+    --rpccert="/rpc/rpc.cert" \
+    --rpcuser="$RPCUSER" \
+    --rpcpass="$RPCPASS" \
+    --debuglevel="$DEBUG" \
+    "$@"