[Zambyte]

I run an instance that strictly loses money (I do not accept donations). Part of what is great about the Fediverse is that it does not have to make money to be successful. The costs are distributed among so many people, that it's a reasonable expense to deal with in many cases.

That is in part true for development as well. Because the clients and servers are Free Software with a lot of eyes on them, they don't really need to make money to be useful.

[rvz]

Unfortunately instances need to make money to be sustainable to cover the hosting costs as they get more users. A common way of doing that is donations, but that is not even viable if they start getting more users (increasing hosting, bandwidth costs) and to compete against Big Tech.

The parent comment has recognized the problem:

> Between that and all the "donation-funded instances" that never seem to be in the black (and the ones that do can only say so because they are getting all free labor from volunteers/moderators) I really start to wonder if we will ever make a dent on the Big Tech and VC-funded companies. The resources being given to the developers is ridiculous small, and no one wants to admit it.

The first step in tackling a problem is to recognise and acknowledge that there is a sustainability issue that needs to be solved properly. In the end, the only instances that will be around are the largest and most centralized instances that have the most users.

Thus, even if that happens, donations will not be a viable source of revenue to counter the increasing operational costs as an instance gets used by more users.

[Zambyte]

> Unfortunately instances need to make money to be sustainable to cover the hosting costs as they get more users.

That's true, but instances do not need to continuously get more users for the Fediverse to be successful. In fact, that would lead to an unhealthy federated network. See what happened to XMPP with Google Talk for example.

For the Fediverse to be successful, the cost of running it must be distributed.

> In the end, the only instances that will be around are the largest and most centralized instances that have the most users.

I absolutely disagree. It's rare that small instances struggle to keep the lights on, because they are so cheap and easy to run. You can run Pleroma for a few people easily on a $5 VPS or a Raspberry Pi in your closet. Source: I did that. The only reason I don't anymore is because I migrated my instance to my Dell server, because I have one.

Big instances are the ones that struggle the most, because they're the ones that the cost is real enough to be a problem that needs to be considered. See rglullis' comment for an example of this. See the mastodon.technology shutdown[0] for another example.

> Thus, even if that happens, donations will not be a viable source of revenue to counter the increasing operational costs as an instance gets used by more users.

I agree.

[0] https://news.ycombinator.com/item?id=33120136

[rglullis]

Yeap, pretty much. I wrote about it how unsustainable this is on https://raphael.lullis.net/community-is-not-enough/

Another data point, newsie.social, an instance with 20k active users and at risk of closing: https://honeytree.social/@jeff/110821899439006428.