New Ethereum User with some basic questions

boilertigerboilertiger Member Posts: 1
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.







Comments

  • o0ragman0oo0ragman0o Member, Moderator Posts: 1,291 mod
    @boilertiger
    A1) The private key is a file which has content encrypted with your password. If you back it up and your machine is destroyed then you can install the Wallet again on some other machine and import your backed up key. As long as you possess that key, you control the public key address. So you still can access the 10eth regardless of what happens to your machine. This is because all the other nodes (1000's of them) will all still agree that your key is valid once you install it on a new machine.

    A2) As said, the password is what is used to encrypt the key file. A key file is generated for each account you create. So on a new machine you can simply import your backed up copy and nothing more needs doing. But, it's prudent to have a number of semi permanent and disposable accounts for different purposes for privacy reasons that could all have the same password.

    It's worth pointing out there are other ways of interacting with Ethereum that don't need the wallet which has to download Gb's of blockcain and state data. There a couple of web wallets in which you keep the key and only apply it to sign Tx's when needed. Or you could simply keep your ether in an exchange wallet, which is the least secure as you have no private key and are trusting that the exchange won't run or get hacked.
  • revcrevc Member Posts: 72
    You can use myetherwallet to generate a wallet that can send and receive transactions, as well as hold eth online. No need to use mist and store the entire blockchain.
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