I actually have an interest in doing this as well. One concern though. Wouldn't standing up a Lemmy instance on you own network and federating potentially attract unwanted attention to your IP? Would it be better to host on a VPS instead?
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What exactly do you mean with "potentially attract unwanted attention to your IP"? Any public IP attracts automated bot probing, regardless of what you host on it... and the rest is pretty much FUD by VPN snake-oil vendors.
If you really don't want people to know your home ip, then you can use cloudflare's proxying service for all you internet facing services.
You will need to fine-tune the database a bit, but generally speaking this hardware should be sufficient for a medium sized instance < 1000 members or so. What kind of connection do you have? Lemmy itself is not very bandwidth heavy, but image storage and remote access can be somewhat problematic if you have a very slow upload speed.
A good frame of reference would be the VPS that lemmy.world is running on imo. Looks like they upgraded to a 4 core/16gb setup to handle the influx of users, so if your instance is running under 1k users, I believe those specs would be sufficient.
If it starts chugging, I wonder how well it'd work to run the server on the laptop and the DB on a VPS (or vice versa).
Should be able to handle a few users OK. You might want a more permanent server to run it on if they want to keep using it long term though.
Small instances don't seem to require anything major, I'm running mine on a VM with 4c/6gb ram/256gb disk with no issues- it's just a few Docker pods. Just make sure you use a dynamic DNS provider if you're hosting from home, as valid SSL is required to connect to the federation.
Any concerns you that you may attract attention to your network? I'm interested in doing the same thing you are.
You could also get a second static IP address from your ISP to keep it separate from your home network.