Others have answered the crux of your questions, which is that it's basically donations... either from the admins by providing free access to their server, or by the community through Patreon or whatever.
But to put into context how much money we're talking about...
A server to host 1k active users and 5k-10k registered users, you're talking about a 4cpu-8cpu box costing less than $20/mo. Plenty of nerds with decent jobs in wealthy countries are willing to write that off as a donation. This covers 99% of the <1k Lemmy servers in the world.
The 10 biggest Lemmy servers still only have hosting costs of $50-$300/mo. That's not nothing, but there are probably 10 wealthy nerds in the world willing to write that much off each month. And those costs can be offset through community donations. These servers support 10k-40k registered users, it doesn't take a ton of donations to cover that modest expense serving that many people.
Now, if you count admin/mod time and expertise, of course... those costs would be huge. But those people either volunteer or get a bit of money from non-profits. But the hardware costs are modest.
Do note, HOW they are hosting, pays into this a lot.
I have a server I host things on here locally-
256G of ram, 32 cores/64 threads. 130T of storage. Nvidia Tesla GPUs. Coral TPUs. Lots of NVMe too.
It costs 20-30$ of energy, along with internet use-costs.
Hosting, something of that scale in the cloud, would be outrageously expensive. However, here in my local home-datacenter, with redundant power, internet, and everything, its honestly not that bad.
And- I assure you, there is redundancy. My lemmy had basically no downtime AFTER getting hit by a tornado, and power to the city being out for most of the week.- > lemmyonline.com/post/3751
The devs… have socialist tendencies(by their own admission, their words, not mine!), and are more then happy to live on peanuts and bread while building software for the better of humanity.
However, donations to the project, do pay for their basic expenses.
Lemmy itself is an open source software. It's developed by a community, and was originally created by two developers. It does not make money, except from things like donations or patreon.
Lemmy instances are run by different members of the community. Various folks have answered ways that instances could make money but may not make money in any ways.
The Lemmy project also receives grants from NLnet (funded by the European Commission), whenever they finish milestone features. According to the developers, this was their main source of funding until very recently and are now asking for more donations.
TBH I want a option to enable ads to support my instance since I can't donate money. There should be a way to opt in ads . There will be a lot of people who will be willing to enable it to support their instance.
You getting ads will give them like a dollar a year and you'd absolutely have to have tracking enabled for them to even get that, unpersonalized ads are deemed pretty worthless because you don't click on things that you aren't into. The extra power consumption from loading ads + extra spying on you will cost you about as much as the instance would get from it.
If you donate 5 dollars a year, you're doing more than you would by seeing ads.
I can assure you that is not the case. If an instance has any amount of users, ad revenue can be huge. It may be a couple bucks a month per user, but if you have a thousand users, that's enough to pay for servers and then some.
The real issue comes with the requirement for more heavy moderation, if you bring in advertising.
Reddit's reason for monetizing the APIs was making an average of a dollar a year per user. That's despite the official app having way more downloads than the 3rd party ones.
Facebook makes 50 dollars a year (which pretty much is a couple bucks a month) per user because it tracks you not only on its own website, but on most other websites too (like & share buttons, facebook pixel, etc) even if you don't have an account.
If you pay $5 per year to your instance host, it is more than they can make with unintrusive ads.
It’s non profit by default, the very thing that social media needs.
People who run Lemmy servers do it at their own cost. That’s not to say they can’t run ads or choose other ways to become profitable. The big difference between a lemmy instance and something like Reddit is that anyone can start a new instance if the current one goes to shit. If the admins do something the users REALLY don’t like, they can migrate to another instance way more easily than switching platforms.
Reddit is counting on the effort of switching platforms being too high for lemmy to gain traction. They are wrong.
The developers do it for free, which is common in the open source community. There will always be volunteers to build the software and donors to support them.
I have wondered how migrating instances would work. Would anything come with me to a new account on a new instance or is it still similar to moving from Reddit where I'm starting over?
Mastodon has a way to migrate so it's possible with ActivityPub. There's an open issue for migrating instances that wasn't closed so I assume it's planned. I have no idea if it's being actively worked on though.
Edit: migraine to migrating. It's all a headache though.
At the same time, we are seeing lots of requests to implement major new features, such as migration between instances, or combining similar communities. As described above, we are completely overloaded with work, and definitely won’t have time to implement these in the near future. If there is a feature you want to see implemented, you will likely need to work on it yourself, or find someone who can.
So no, currently you can't move. You can only create a new account on another instance, and start using that instead. At least you're still on the same platform.
Given the popularity of the issue, I would assume it will find a solution. But given no one is assigned to it yet, we probably still have no people willing to work on it.
pulls out a pocket Gandalf who puffs an Uncle Sam in the air, pointing at YOU
I am already running a server for media streaming, nextcloud and minecraft. For sure i have room to add a small lemmy instance soon, not everything needs to make money or even be electricity even. But for larger instances though they must be gething some donations.
Everything needs to generate some sort of value - I imagine a lemmy instance would generate value for you in the form of learning, or maybe the sense of accomplishment from maintaining a community. That differs from how centralised social media generates value in the form of data or money which is usually at odds with the userbase.
Media hosting is the biggest expense, and there are services that make that significantly cheaper through sharing and deduplication.
A major instance can probably get by on a few hundred dollars a month. If it has, say, 100k active users, and 1% of them donate $5 a month, then not only is there enough to cover infrastructure expenses, but they can also put some aside in a rainy day fund, use it to expand hosting to other platforms (lemmy.world is made possible, at least initially, by donations to mastodon.world), or even pay instance-level mods.
Mstdn.social, a very busy Mastodon site, has 200k users and runs on a 32 core VPS with 128GB of RAM. Comparable unmanaged VPS packages go for around $300/month. After that, it's all media storage.
The world's most popular fanfiction website, Archive of Our Own, runs entirely on donations so it's certainly possible to run a website with a big userbase on donations only, although the website in question does not host images or videos so the situation is of course a bit different. But a dedicated userbase can actually make a donation run website possible.
It doesn't make money. It's funded either by donations, or out of the pockets of the instance owner(s). It doesn't mean that in the future, an instance owner wouldn't just decide to start serving ads, I don't think theres anything stopping them from doing that other than the threat of being defederated by other instances.
That's the problem: it does not make money.
The fediverse mean that the different instances can federate, but every instance after all still has its server and its expenses just like every web service since... always. Forums, chats, socials...
So far donations or pro bono from whoever is managing an instance, but unluckily this is not sustainable if user number skyrocket.
A way would be to somehow make everything p2p but I don't even know if it's possible for what is needed.
Servers are expensive, either someone pays, or the instance closes.
As of now very few people are on the fediverse, so it's cheap.
But if we expect hundreds of millions of people to use it... expenses will skyrocket.
True, but the amount of instances will probably scale too. You can have premium instances that cost a monthly fee, ones that solicit donations, maybe ones that run ads. But you'll also always have the passion project instances being ran for a specific community out of the kindness of someone's heart.
Right now, this is a service being provided largely by volunteers, with some help from donors. For example, the lemmy.world instance is run by the same person as mastodon.world, who has posted some information here about the costs and donations involved in running Fediverse services.
As it turns out, it's not super expensive to run a public-facing Internet service with a few thousand users if you're interested in doing so as a hobby activity. And a lot of folks are willing to donate to help the project along!
More generally: Over the history of the Internet, new services have often been prototyped by researchers, students, and hobbyist volunteers. These folks are expecting to spend a little money to make the service work, and usually enjoy it when people using the thing they've built! They usually don't have an immediate need to monetize everything, but they often accept donations if you're enjoying their work and want to contribute that way.
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