I will certainly reconsider buying a hardware wallet as a lot of forum members have suggested me to go that way.

Yes there isn't a single wallet which supports all the cryptos I hold.

Thanks once again. I really got to learn a lot from you. 

Thanks for commenting Lucius! 

By what is stated at Exodus site it is possible to view private key for any address, so you can just copy/paste your private keys and store them in safe place. In case something happens to your device it is possible to import that keys on other device and restore your coins, read more here.

But much easiest way is to just write down 12 secret words (seed) which you get when create Exodus wallet, and then you have all you need in case you need it, read more here.

I read those guides & it seems to be very easy to access your funds from another device in case something goes wrong with the device you are using.

This should be good way of protecting your coins, but only in case you have clean device/there are many sophisticated attacks these days aimed to hack crypto coins on users PC. So you shoud be very careful when using your device, even if you using desktop wallet.

I am planning to buy a new PC (probably a netbook) or else as mentioned in the guide written by BQ (forum member), I can install linux on my current windows PC to do crypto stuff. If I buy a separate device for this then I will keep it disconnected from internet until I want to sell my holdings.


I know you have no intention to invest in hardware wallet, but for long term holding in my opinion it is best option. Private keys are always safe inside device, even if your device is compromised it will not affect security of your coins.

Yes I know that hardware wallets are the safest option available at present. Many other members as well have suggested me to get one. I will reconsider my decision of not buying a hardware wallet.

Thanks for recommendation Vitalicus! 

To be honest, I am not willing to spend on hardware wallets. Can you suggest me some alternatives?

Thanks for replying 

Visited the official website of imtoken. The website isn't much informative. They haven't even mentioned the list of coins they support. No mention of storage of private keys. On Play store it has mixed reviews. Would prefer to stay away from it.


Monarch definitely seems to be promising. It supports BTC, ETH & all ERC20. Cold wallet is offered in MVP. The website mentions that the users will be able to own their private keys. Haven't mentioned though whether they store it on server, somewhere else or not. It has only 12 ratings on itunes. It still is in early phase.  Might give it a try.

Heyya! Thanks for replying  

Exodus' website states, "Exodus encrypts private keys and transaction data locally for your eyes only. Your data remains private". Also in the demo video, a co-founder mentions that Exodus holds your private keys and there are no hosts & servers thus this approach gives you total control. I guess this means that your private keys are stored locally & nowhere else (Servers & all)

I am not a techie person so just want to ask one question:

If Exodus stores private keys locally & suppose that my device gets lost, stolen or damaged then is it possible to access my account using some other device?

Kindly guide me on this.

Hey Noobaru! Thanks for replying 

I am not willing to spend on hardware wallets. Can you please suggest me alternatives?

Hey! Thanks for replying 

Visited official websites of Ethos & Trust. Ethos' website mentions that they never hold assets & users remain in complete control at all times. It also mentions that they provide one of the best mobile-first, hot wallets. On one of the pages it says, "Take back control. The Ethos SmartKey and SmartWallet allow you to maintain complete control of your funds at all times. The days of trusting your funds, private keys and assets with a centralized entity are over". I am confused after reading all these. Can you please answer a few questions like:

1. Is it a hot wallet?

2. Where do they store private keys?

It supports few coins that I hold but I couldn't find the mention of ERC20 tokens in the "supported coins list" section.


           Trust's website mentions that they support all ERC20 & ERC223 tokens & the private key is stored locally. They are also joining Binance soon. Trust certainly seems to be trustworty

Excellent guide with some really helpful tips for non tech savvy people or beginners.

Thanks for answering my question  

Just wanted to know that isn't it unsafe to access MEW using the computer which we use daily & is connected to internet round the clock? Kindly guide me.

Thanks for replying 

Yes some of them are ERC20. BTW I don't want to spend on hardware wallets. Can you suggest me alternative options?

Hey BQ! Thanks for replying  

I read your wallet guide & I must admit that it is one of the best articles I have read till date on crypto wallets. You have explained it so well using simple language without any heavy words. Moreover the tips you have given are truly helpful for a non techie person like me. Thanks a lot for making such a wonderful guide.

I couldn't understand a few things from the guide. I request you to guide me on the following:

1. You have mentioned that MEW doesn't save keys. Does that mean it gives users exclusive access to their funds? & if it doesn't store private keys anywhere then how did people loose their cryptos in the MEW hacks as the hackers also need private keys to steal funds?

2. You have mentioned that the MetaMask stores a file locally encrypted with a password. What does "locally" mean here? is it hard drive of the computer?

3. If the device where I have installed or access MEW & MetaMask from gets lost, stolen or damaged, will I be able to access my account using some other device?

4. In the summary section, you have mentioned that MetaMask protects more & by using MEW, one is exposed to third party hacks. Can you please elaborate this?

5. If I buy a new device (computer or smartphone), keep it disconnected from internet & use it only for the purpose of storing cryptos, is this method safe enough? Is installing a second OS like Linux Mint on the laptop which I use daily safe enough? Is running Linux Mint using USB/CD on the same laptop safe enough?

              I am not willing to spend on hardware wallets & yes I hold 80 cryptos, some of them are ERC20.

Hi Teraboy! Thanks for answering my question 

I visited official websites of Coinomi & Exodus. Coinomi's website states, "Your private keys never leave your device". I guess this means that your private keys are stored locally & nowhere else (Servers & all). Exodus' website states, "Exodus encrypts private keys and transaction data locally for your eyes only. Your data remains private". Also in the demo video, a co-founder mentions that Exodus holds your private keys and there are no hosts & servers thus this approach gives you total control. I think this also means the same.

I didn't have a look at what Trezor is offering as I don't want to spend on hardware wallets.

I am not a techie person so I don't know much about the private key export feature. Is it possible to have a copy of my private key by exporting it? How do I save it (soft copy or hard copy)? If Coinomi & Exodus store private keys locally & suppose that my device gets lost, stolen or damaged then is it possible to access my account using some other device? Kindly guide me on this.

Thanks in advance.

Which multi cryptocurrency wallet is safe for long term holding that either stores private keys locally or gives users exclusive access to their private keys?

I am currently holding around 80 different cryptocurrencies in small amounts. I want to hold these coins for long term. Need a safe wallet where I will be able to store all my coins. As I have heard that servers where users' private keys are kept by wallets can be hacked, I want to hold my coins in a wallet which stores private keys locally or gives exclusive access of private key to the user (the one which doesn't store private key anywhere). I am not willing to spend money on hardware wallets. I am planning to store these coins on a desktop or a mobile wallet (or a wallet like metamask & myetherwallet). Planning to buy a new desktop or mobile which I will use only for the purpose of storing cryptos & will keep the device disconnected from internet until I want to sell my coins.

Does tether.to allow Indian users to register?

                                          IS IT LEGAL TO RECEIVE BITCOINS FROM ABROAD?

According to New Delhi based law firm - Lexcounsel, from the perspective of foreign exchange control laws, purchase of VCs by an Indian resident, can be viewed as import of a software/computer programme into India, requiring compliance with applicable foreign exchange control laws including RBI's Master Direction on import of goods and services into India, with respect to imports being made in non-physical form. Though they haven't mentioned exactly what compliance is required & what is RBI's Master Direction.
   Will appreciate if anybody here who knows what compliance is required & what is RBI's Master Direction, guides other members as well.
   
   On the other hand, The article titled as "Can Bitcoin Be Banned by the Indian Government?" on cis-india.org states, if a person imports a computer programme into India he would have to pay the customs duty at the prevalent rates, however if this import of software is done via the internet and does not involve any physical shipments (e.g. downloading paid software from the internet) then no import duty is levied on the import of computer software in India. This would mean that any person buying a computer programme or software from a vendor abroad would not be liable to pay any customs duty or file any documentation with the customs authorities in India. This situation would also be applicable to any person buying Bitcoins from an online exchange based outside India. The only documentation that would be required for buying Bitcoins from an online exchange abroad would be that which the bank may insist upon for converting Indian rupees into a foreign currency and then transferring it to an overseas account. This documentation would involve filing of Form A-1 if the total value of the money being exchanged is greater than USD 5,000 however if the amount of money being exchanged is less than USD 5,000 then the person is only required to give a simple letter containing basic information viz. the name and the address of the applicant, name and address of the beneficiary, amount to be remitted and the purpose of remittance. If the transaction is done using a credit card then in most instances, banks would not insist upon this letter since these transactions usually go through their automated channels.   

So, I have a few questions here:

1. According to Vipul Kharbanda, we don't need to file any documentation (except the documentation which your bank may insist upon) while importing Bitcoins like this from an online exchange(he hasn't mentioned anything about the documentations you need to file if you are buying Bitcoins from an individual). Can anybody guide me whether Mr. Vipul is right here or not?

2. What documentation we need to file if we are buying Bitcoins from an individual located outside India?

3. What if the imported Bitcoins are sold for INR?

4. What if a person is importing Bitcoins on frequent basis & selling it for INR(commercial purpose)? What documentation filing or compliance will it require?
 
The article titled as "Can Bitcoin Be Banned by the Indian Government?" on cis-india.org says, although we have determined above that Bitcoins would in all probability be treated as goods and therefore any sale of Bitcoins would be governed by the Sale of Goods Act, 1930 however it must be noted that the Sale of Goods Act does not regulate barter transactions. This is so because the sale of goods means a contract whereby the property in the goods is actually transferred by the seller to the buyer and according to section 4 of the Sale of Goods Act the transfer of the property in the goods is for a price, i.e., for money consideration. As price is an essential element of a contract of sale, barter is ruled out from a transaction of sale of goods. This means that any transaction whereby payment is made in Bitcoins would come within the category of a barter transaction, for example if flipkart.com starts accepting payment in Bitcoin then the transaction of paying for a pair of shoes through Bitcoin would infact be a barter transaction and would not be governed by the Sale of Goods Act.
   As mentioned in the research paper by NDA, an interesting issue that arises is the implications of a contract that provides Bitcoin as consideration, i.e., payment, under the contract. Contract Act does not provide the form or manner in which consideration may be paid by one party to another. However, in a contract for sale of goods under the Sale of Goods Act, consideration cannot be in kind. As held by the Supreme Court in Commissioner of Income Tax, Hyderabad v. Motors and General Stores (P.) Ltd., Section 2(10) of the Sale of Goods Act defines “price” as meaning the money consideration for a sale of goods. The presence of money consideration is therefore an essential element in a transaction of sale under the Sales of Goods Act and not a transaction under Contract Act. If the consideration is not money but some other valuable consideration it may be an exchange or barter but not a sale. As long as Bitcoin are not currency / legal tender, they can only be considered as ‘value for money’ or goods. Therefore, Bitcoin would qualify as a consideration under the Contract Act but not as consideration under the Sale of Goods Act.
   Does this mean that when I buy bitcoins from an individual/company located abroad, the Sale of Goods Act will be applicable & when I export goods or render services to someone aborad & accept payment in the form of Bitcoins, the Contract Act will be applicable?

The above mentioned article states, if Bitcoins are transferred from a person residing outside India to a person resident within India then that would amount to import of computer programmes within India where this transfer is done in return for the Indian party sending money. If this transfer is done in return for the Indian party sending an item or rendering a service to the foreign party then this would be a barter transaction. It is useful to note that although the Indian import and customs regulations do not mention barter transactions, the guidance on the website of the Directorate General of Valuation, Central Board of Excise and Customs, Government of India seems to suggest that barter transactions for import of goods although are not prohibited but do present unique problems of valuation of the goods. However since software imported online does not attract any duty under Indian law, therefore it would be immaterial to discuss exactly how a barter transaction involving Bitcoins should be valued under the Indian customs regime. For the purposes of this discussion it is sufficient to note that a Bitcoin transaction entered into by an Indian with a party outside India is not prohibited as long as the item or service being exported out of India is itself legal and above board. For example, a transaction involving an Indian designing a website for a person sitting in Australia and being paid in Bitcoin would be legal whereas sending contraband substances to the same person while getting paid in Bitcoin would not be allowed. This would be the legal analysis for a general citizen but this analysis is subject to regulations governing specific instances, for example exchange or goods or items from certain countries may be declared illegal or the receipt of foreign articles by certain class of entities may be banned or otherwise regulated, such as political parties or Non Governmental organisations (“NGOs”).

I again have a few questions:

1. Mr. Vipul says, the software imported online doesn't attract ANY DUTY under Indian law, so is he right here?

2. What legal procedure like documentation filing, obtaining a particular license etc. you will have to follow when you are doing such kind of barter transactions on regular basis?

3. What if you sell the Bitcoins you have received as consideration for INR?

4. Which laws these kind of transactions are supposed to be in compliance with?

5. Can anyone here guide others on, which countries term exchange of goods or items (barter transactions) across borders as an illegal activity?

FEMA regulates all inbound and outbound foreign exchange related transactions, in effect regulating (or managing) the capital flows coming into and moving out of the country. Section 3 of FEMA states that other than as provided (and specifically enunciated) in either FEMA (or its underlying rules and regulations) or unless a special or general permission of RBI has been obtained, no person shall:

i. make any payment to or for the credit of any person resident outside India in any manner;
   Does this mean if I buy Bitcoins from someone(Individual/Company) outside India, I can't make any payment to them in any manner (Not even through legitimate banking channels)?
   
ii. receive otherwise through an authorized person, any payment by order or on behalf of any person resident outside India in any manner;
   Does this mean that if I export goods or render services to someone(Individual/Company) abroad, I am not supposed to accept any payment from them in any manner (including Bitcoins)?

iii.enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire, any asset outside India by any person.’

(Note : I just was not able to understand what does the above mentioned S.3 of FEMA state. So any guidance on the same will be highly appreciated).

The research paper by NDA states, from the above, it could be argued that purchasing of Bitcoin by a resident Indian from a person resident outside India (where money for purchase of Bitcoin is transmitted through legitimate banking channels) will not be in violation of FEMA. Further, Bitcoin transaction between two residents should also not trigger FEMA and should not therefore be in violation of the same. However, the sale of Bitcoin to a non-resident person (i.e. to a person outside India) by a resident Indian will be in violation of the provisions of FEMA. Further, it can also be regulated by RBI in this condition.

                         WHETHER BITCOINS ARE LEGAL IN INDIA? IF SO, WHY?

As such, there is no prohibition to mining or trading in Bitcoin or transfer of Bitcoins. Following points to be kept in mind:
Constitution of India, 1950; If we look at the present entries enumerated under Entry 36 and 46 of List I of the Seventh Schedule read with Article 246 of the Constitution, which states that the Central Government is allowed to legislate in respect of currency, coinage, legal tender and other like instruments respectively. It is also stated that each entry will be read in a broader and widest possible sense. However, Court has never interpreted these entries to include “Virtual Currency”. Thus, even if parliament has power to make law on the “Virtual Currency” under Article 248 of the Indian Constitution. However, the same has not been done. Since, in the present scenario “contract” also includes “electronic contract”. S. 23 of the Contract Act provides that certain considerations are unlawful and certain contracts may be opposed to public policy. Public policy has not been defined in the Contract Act and is an evolving expression. The Supreme Court has held that courts ought not to be quick to expand on the scope of what is public policy, they may, in the context of facts and circumstances take into account new developments and explain the same in the context of public policy. Section 23 of the Contract Act provides: What consideration and objects are lawful, and what not. The consideration or object of an agreement is lawful, unless -
it is forbidden by law;
or is of such nature that, if permitted it would defeat the provisions of any law;
or is fraudulent;
or involves or implies, injury to the person or property of another;
or the Court regards it as immoral, or opposed to public policy.
   In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. The Supreme Court has held that courts would not arbiter on soundness or otherwise of general policy decisions. Further, courts ought not to engage in the exercise of whether one particular policy is good over the other. There is nothing in law to suggest that Bitcoin are opposed to public policy or otherwise unlawful. A contract relating to Bitcoin, prima facie, is not such that its enforceability would defeat the provisions of law or is otherwise fraudulent. Therefore, a contract respecting Bitcoin, whether it is in relation to mining of Bitcoin, transfer of Bitcoin or transfer of Bitcoin for consideration, is not per se illegal.
   But a court is empowered to hold that Bitcoin are opposed to public policy and therefore not valid consideration under Indian law. However, the same has neither been amended nor been interpreted by the Court to include Bitcoin. Hence, it falls under the ambit of Contract Act but even if court states that a Bitcoin contract is opposed to public policy, it will be limited for only that particular contract and will not extend to the all Bitcoin contracts.

                                                               PART X
 
                            CONCLUSION

From the above posts it can be concluded that under the existing laws in India,

1. Bitcoin isn't Indian currency. It is not bank notes and is consequently not legal tender in India. Plus recent comment from the executive director, S Ganesh Kumar at the FIBAC banking event made it clear that RBI is not going to accept it as Indian currency.

2. Bitcoin isn't a security or derivative. But the central government has the powers to declare it a security. In that case Bitcoins will be regulated by SEBI.

3. Bitcoin isn't a prepaid instrument. Though I am not sure whether it can be considered as a payment system or not.

4. Bitcoin isn't a negotiable instrument.

5. Bitcoin may fall under the ambit of 'Computer' & given it's nature it is most likely to be defined as a 'computer program' & by logical extension Bitcoin should be considered as 'movable property'.

6. Bitcoin can be classified as 'Goods' of intangible nature as well as a 'Commodity'.

NOTE : Although Bitcoins can currently be classified as a computer/computer program/movable property/goods/commodity, this position is not tested in a court of law.

                                                               PART IX

                            IS BITCOIN A COMMODITY?

According to Mr. Venugopal Badarawada, a life member of Bitcoin Foundation Inc(USA), who had sent a legal letter to the Reserve Bank of India (RBI) in January 2014 seeking clarification on its stance against virtual currencies & demanding a clear policy framework, Bitcoin is an “Electronic Document” as per Information Technology Act 2000/8 (ITA 2008) and hence carries “Legal Recognition”. If this “Legal Recognition” has to be removed, it would be necessary to amend ITA 2008 & therefore RBI has no rights to ban Bitcoins. Whether this electronic document is a “Currency” or a “Commodity” or a “Derivative” is left to the community to decide based on their perception on its usage. For want of a better description, it is better to consider Bitcoin (as in deed any Cryptocurrency) as a “Commodity in electronic form which the public may use for any legal purpose”. No other conclusion is logical.

The term commodity has not been defined anywhere under the law in India. In the case of Tata Consultancy Services V. State of Andhra Pradesh, Hon’ble Justice Sinha concurring with the court’s view stated, “computer software is intellectual property, whether it is conveyed in diskettes, floppy, magnetic tapes or CD ROMs, whether canned (Shrink-wrapped) or uncanned (customized), whether it comes as part of computer or independently, whether it is branded or unbranded, tangible or intangible; is a commodity capable of being transmitted, transferred, delivered, stored , processed , etc. and therefore as a ‘good’ liable To sale tax.” He also added that a commodity is generally understood to mean goods of any kind, something of use or an article of commerce.

Since bitcoin is basically a computer software & may come under the ambit of goods, it leaves open the possibility of being characterized as a commodity under Indian law.

                                                                 PART VIII

                            IS BITCOIN A GOOD?

Bitcoin may very well fall under the meaning of “goods” and may be covered under the Sale of Goods Act. The act defines “good” as:
“every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale.”
   Further the Forward Contracts (Regulation) Act, 1952 also defines goods to mean “every kind of movable property other than actionable claims, money and securities”.

In Tata Consultancy Services v. State of Andhra Pradesh, the Supreme Court stated that, “computer software is intellectual property, whether it is conveyed in diskettes, floppy, magnetic tapes or CD ROMs, whether canned (Shrink-wrapped) or uncanned (customized), whether it comes as part of computer or independently, whether it is branded or unbranded, tangible or intangible; is a commodity capable of being transmitted, transferred, delivered, stored, processed, etc. and therefore as a ‘good’ liable To sales tax.”

On a bare reading it seems that Bitcoins can be classified as 'Goods' of intangible nature (akin to a computer programme or software).

We will see whether Bitcoin can be classified as 'Commodity' under the current legal regime in India, in next part.

Thanks dude for appreciation. I have spent so much of time to study this thing & it really feels good when someone appreciates your hard work .

I don't run any blog/site. That's why I have documented it here.

Yes, I will keep posting here & will appreciate advice/suggestion/guidance/correction or any kind of contribution from members.

I generally try to avoid such kind of arrogant people who think they are the only creatures with brain on this planet (I have seen many on this forum). But this stupid fellow pissed me off. I have done a lot of hard work on this topic & don't expect such kind of baseless replies.

Anyways, thanks once again for your support.