I am interested in purchasing some Ether on an exchange and am looking to make my first transfer to a Mist wallet. The whole process is new to me, so it is inherently slightly confusing.
I have read as much information about pubic key encryption as I can find, but I don't think the concept will truly make sense to me until I've actually started using something which is based on it.
As far as I can gather, Mist is essentially an application which can be downloaded and run on multiple different devices or machines. In order to use Mist, I must set up a password. If a user wants to use the Mist wallet to store/use their Ether then they must also have an account. The account has an address. This account address is the public key which can be viewed by everyone on the Ethereum blockchain. The activity of a particular public key (account address) can be monitored using various applications that have been configured to view the Ethereum blockchain.
Two questions which I have:
1) Assume I backup the private key for an account after I've transferred my first 5 ETH into that account. Assume I then transfer 5 more ETH to the same account (total of 10) but do not back it up and the device that is running the instance of Mist with that private key is destroyed. Would I be able to recover 5 ETH or all 10 ETH?
2) What function does the Mist password serve? If I downloaded Mist on a separate machine and created a completely different password, I would still be able to import a private key which had been backed up, correct?
Appreciate the clarification.