diff --git a/Vagrantfile b/Vagrantfile
index c3fd6bf..2041ef5 100644
--- a/Vagrantfile
+++ b/Vagrantfile
@@ -1,11 +1,24 @@
-FLASK_PORT=5000
-POSTGRESQL_PORT=5432
+db_file_exists    = "test -f /vagrant/edison/db.sql"
+restore_db        = "sudo -u postgres psql edison < /vagrant/edison/db.sql"
+db_restored_msg   = "echo \"Database restored.\""
+db_not_exists_msg = "echo \"db.sql not exists.\""
+try_restore_db    = "bash -c '#{db_file_exists} && #{restore_db} && #{db_restored_msg} || #{db_not_exists_msg}'"
+save_db_data      = "sudo -u postgres pg_dump edison > /vagrant/edison/db.sql"
 
 Vagrant.configure("2") do |config|
+  config.trigger.before :destroy do |trigger|
+    trigger.info = "Saving database data inside synced folder..."
+    trigger.run_remote = {inline: "#{save_db_data}"}
+  end
+
+  config.trigger.after :up do |trigger|
+    trigger.info = "Trying to restore database from /vagrant/edison/db.sql..."
+    trigger.run_remote = {inline: "#{try_restore_db}"}
+  end
+
   config.vm.box = "ubuntu/bionic64"
   config.vm.provision :shell, path: "setup.sh"
-  config.vm.network :forwarded_port, guest: FLASK_PORT, host: FLASK_PORT
- config.vm.network :forwarded_port, guest: POSTGRESQL_PORT, host: POSTGRESQL_PORT
+  config.vm.network "private_network", type: "dhcp"
   config.vm.provider "virtualbox" do |v|
     v.gui = false
     v.name = "Edison_test"
@@ -14,3 +27,11 @@ Vagrant.configure("2") do |config|
   end 
 
 end
+
+# Fixes a dhcp configuration conflict of the private network.
+# Issue: https://github.com/hashicorp/vagrant/issues/8878
+class VagrantPlugins::ProviderVirtualBox::Action::Network
+  def dhcp_server_matches_config?(dhcp_server, config)
+    true
+  end
+end
diff --git a/edison/__init__.py b/edison/__init__.py
new file mode 100644
index 0000000..d4ff709
--- /dev/null
+++ b/edison/__init__.py
@@ -0,0 +1,12 @@
+import os
+
+from flask import Flask
+from flask_sqlalchemy import SQLAlchemy
+from edison.config import get_config_object
+
+
+# Put app here so the entire app could import it.
+app = Flask(__name__)
+app.config.from_object(get_config_object(app.config["ENV"]))
+basedir = os.path.abspath(os.path.dirname(__file__))
+db = SQLAlchemy(app)
diff --git a/edison/app.py b/edison/app.py
new file mode 100644
index 0000000..34f3711
--- /dev/null
+++ b/edison/app.py
@@ -0,0 +1,34 @@
+import edison
+import edison.models as models
+
+from flask import render_template
+from flask_restful import Api
+from flask_jwt_extended import JWTManager
+
+
+app = edison.app
+db = edison.db
+api = Api(app)
+
+# Creates all tables defined in the database models and the only ones that are not created yet.
+# If there's any change in the database models you should perform a migration to apply this change in the database itself.
+# More about database migrations can be found in /edison/migrations/README.
+db.create_all()
+
+# Creation of Json-Web-Token manager.
+# In order to reach secured endpoints client should add an authorization header with the value Bearer <token>.
+jwt = JWTManager(app)
+
+# This decorator is a callback and it is called every time user is trying to access secured endpoints. 
+# The function under the decorator should return true or false depending on if the passed token is blacklisted.
+@jwt.token_in_blacklist_loader
+def check_if_token_in_blacklist(decrypted_token):
+    jti = decrypted_token['jti']
+    return models.Token.query.filter_by(jti=jti).first() is not None
+
+@app.route("/")
+def index():
+	return render_template('index.html')
+
+if __name__ == "__main__":
+    app.run(host='0.0.0.0')
diff --git a/edison/config.py b/edison/config.py
new file mode 100644
index 0000000..ed04143
--- /dev/null
+++ b/edison/config.py
@@ -0,0 +1,40 @@
+import secrets
+import importlib, inspect
+import sys, inspect
+
+config_dict = {}
+
+# If config_dict is empty this function builds it dynamically 
+# and returns the appropriate config object path.
+def get_config_object(env_keyword: str):
+    if(len(config_dict) == 0):
+        # Iterating through all config.py members
+        for name, obj in inspect.getmembers(sys.modules[__name__]):
+            # We're interested only with the derived classes of the Config class
+            if inspect.isclass(obj) and name != "Config":
+                config_dict[obj.ENV_KEYWORD] = ".".join([obj.__module__, name])
+    
+    return config_dict[env_keyword]
+    
+class Config:
+    ENV_KEYWORD = ""
+    DEBUG = False
+    # Enables response message for unauthenticated requests
+    PROPAGATE_EXCEPTIONS = True
+    # This tells the JWTManager to use jwt.token_in_blacklist_loader callback
+    JWT_BLACKLIST_ENABLED = True
+    # JWTManager uses this secret key for creating tokens
+    JWT_SECRET_KEY = secrets.token_hex(24)
+    # We're going to check if both access_token and refresh_token are black listed
+    JWT_BLACKLIST_TOKEN_CHECKS = ['access', 'refresh']
+    # Turns off the Flask-SQLAlchemy event system
+    SQLALCHEMY_TRACK_MODIFICATIONS = False
+    SQLALCHEMY_DATABASE_URI = 'postgresql://postgres:edison@127.0.0.1/edison'
+
+# PostgreSQL connection string should be updated once an actual production environment is established.
+class ProductionConfig(Config):
+    ENV_KEYWORD = "production"
+
+class DevelopmentConfig(Config):
+    ENV_KEYWORD = "development"
+    DEBUG = True
diff --git a/edison/models/__init__.py b/edison/models/__init__.py
new file mode 100644
index 0000000..9b6631e
--- /dev/null
+++ b/edison/models/__init__.py
@@ -0,0 +1,2 @@
+from .token import Token
+from .user import User
diff --git a/edison/models/token.py b/edison/models/token.py
new file mode 100644
index 0000000..4797546
--- /dev/null
+++ b/edison/models/token.py
@@ -0,0 +1,12 @@
+from edison import db
+
+
+class Token(db.Model):
+    __tablename__ = 'token_blacklist'
+
+    id = db.Column(db.Integer, primary_key=True)
+    jti = db.Column(db.String(150), nullable=False, unique=True)
+    creation_timestamp = db.Column(db.TIMESTAMP(timezone=False), nullable=False)
+
+    def __repr__(self):
+        return f"<Token: jti: {self.jti}, creation time: {self.creation_timestamp}>"
diff --git a/edison/models/user.py b/edison/models/user.py
new file mode 100644
index 0000000..22cb23c
--- /dev/null
+++ b/edison/models/user.py
@@ -0,0 +1,25 @@
+from edison import db
+
+
+class User(db.Model):
+    __tablename__ = 'users'
+    __table_args__ = {'extend_existing': True}
+    
+    id = db.Column(db.Integer, primary_key=True)
+    username = db.Column(db.String(50), nullable=False, unique=True)
+    password = db.Column(db.String(150), nullable=False)
+    first_name = db.Column(db.String(50), nullable=False)
+    last_name = db.Column(db.String(50), nullable=False)
+    email = db.Column(db.String(150), nullable=False)
+    
+    def to_json(self):
+        return {
+            "username": self.username,
+            "first_name": self.first_name,
+            "last_name": self.last_name,
+            "email": self.email
+        }
+
+    def __repr__(self):
+        return f"<User: id = {self.id}, first_name = {self.first_name}, " \
+               f"last_name = {self.last_name}, username = {self.username}, email = {self.email}>"
diff --git a/static/hello-world-image.png b/edison/static/hello-world-image.png
similarity index 100%
rename from static/hello-world-image.png
rename to edison/static/hello-world-image.png
diff --git a/templates/index.html b/edison/templates/index.html
similarity index 100%
rename from templates/index.html
rename to edison/templates/index.html
diff --git a/flask_init.py b/flask_init.py
deleted file mode 100644
index 14ad216..0000000
--- a/flask_init.py
+++ /dev/null
@@ -1,10 +0,0 @@
-from flask import Flask, render_template
-
-app = Flask(__name__)
-
-@app.route("/")
-def index():
-	return render_template('index.html')
-
-if __name__ == "__main__":
-    app.run(host='0.0.0.0')
diff --git a/requirements.txt b/requirements.txt
index 32e8968..a0082cf 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -1 +1,6 @@
 Flask==1.1.1
+flask-sqlalchemy==2.4.1
+psycopg2-binary==2.8.5
+flask-restful==0.3.8
+flask-jwt-extended==3.24.1
+passlib==1.7.2
diff --git a/setup.sh b/setup.sh
index e344782..147887d 100644
--- a/setup.sh
+++ b/setup.sh
@@ -1,5 +1,7 @@
 #!/bin/bash
 
+FLASK_PORT=5000
+
 echo "updating apt before installation"
 sudo apt-get update
 
@@ -15,6 +17,12 @@ sudo apt-get install -y postgresql postgresql-contrib
 echo "install requirements"
 pip3 install -r /vagrant/requirements.txt
 
-echo "running flask_init.py"
-export FLASK_APP=/vagrant/flask_init.py
-python3 -m flask run --host=0.0.0.0 >> /vagrant/log.log 2>&1 &
+echo "configuring database"
+sudo -u postgres createdb edison
+sudo -u postgres psql -c "ALTER ROLE postgres WITH PASSWORD 'edison';"
+
+export FLASK_ENV=development
+
+echo "running app.py"
+export FLASK_APP=/vagrant/edison/app.py
+flask run -h 0.0.0.0 -p $FLASK_PORT >> /vagrant/edison/app.log 2>&1 &
diff --git a/test/init_test.py b/tests/init_test.py
similarity index 100%
rename from test/init_test.py
rename to tests/init_test.py