I suspect reddit's reported uprofitablity isn't due to the cost of hosting, but from blowing money in other ways.
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Since it's distributed, the cost doesn't even compare to a centralized instance. It's really hard to say how much it would cost to host everyone across the fediverse, but because of decentralization, it'll be a hell of a lot easier to achieve.
There already is a question similar to this. You can find lots of ideas there :)
I'm running a barebones server for myself and a few communities (not many subs yet) which will run for less than a Starbucks coffee a month... (Assuming I don't need more storage space... Lemmy seems pretty light. The main servers are gonna carry the load unfortunately... Beehaw.org had a transparency post about financials as of about a week ago they said something that their instance was costing like 50-75ish a month of I recall.
The thing is, Lemmy is decentralized. You don't need to have an account on an instance (server) to use that instance's "subreddits" (communities) - instances communicate their activity to each other automatically, so any instance will do (provided the instances haven't banned each other). It's just like email.
So it's pretty simple to just stop accepting sign-ups once an instance starts to become impractically large. Anyone can start an instance for just the cost of a domain ($10ish/year, or free if it's a subdomain of an existing website) and a server (that random computer you already have lying around will do just fine, for free). And a small instance can do fine on just donations and the good will of the operator.
Apropos of nothing, where are you finding domains for $10/year?
Check tld-list.com for price comparisons of different domain providers.
I was able to get a .win domain for $4.16 yearly on cloudflare. Cloudflare seems to have some pretty cheap domains.
Put up a yearly donation drive (like Wikipedia) but unlike Wikipedia do:
- a competition between the various instances, on which collects the most donations
- not shift the page content when displaying the donation banner!
Ideally the donations will be handled through a non-profit org dedicated to this particular purpose. If the donation level is high enough, developers can be hired to further improve the source code. Currently the funds are managed through OpenCollective, but with enough growth this may not be feasible any longer.
This will most likely lead to heated debates as this will build a somewhat centralized organization, which necessarily comes with power concentration.
I think the price is spread out across multiple generous people that generously host instances. I think it really depends on how much members there are. From what I heard my instance is 25 $ a month. Another instance I was in on Mastodon cost a few hundreds bucks to run. This is why it is good to help out your fellow admins. On the other hand, lemmy and other fediverse software are open source, so they don't really have to pay for developpers. Also the scope of what lemmy or Mastodon do is considerably smaller that Facebook, Twitter and the likes. Facebook isn't just a social media, it's a spying engine and an ad recommendation platform, Lemmy and mastodon are just social medias, so of course it costs less to do.
Really nice merch, with small logos on. Think how the LTT stealth stuff is.
Reddit used to have something similar to health bar showing how much "gold" was bought to support the website. but later on out of greed they started using it as a paywall.
We can have a health bar that doesnt paywall ANY features and very transparently displays funds raised\used for a server. It can be used to display how much funds its being supported, how much server costs are, salaries for open source maintainers, mods, etc.
You can always have paid-access Lemmy servers