I host my own, and I already have servers for other reasons so there's effectively no extra cost because I can easily handle the load.
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The "why" for me is "Why not?" - I wanted to give Lemmy a try, and I enjoy self hosting stuff! I also felt that opening an instance was the best way I could contribute, since my Rust skills are nowhere near good enough to work on Lemmy's backend and frontend was never my cup of tea.
As for how I pay for it, well regardless of whether I ended up running Lemmy or not I already rent two dedicated servers as a way of "keeping up to date" with knowledge that comes in handy for where I work, so I have no intent on dropping them, and certainly not while I work here.
I host my own to act as the sister of my Mastodon instance. It's hard to afford given I'm a student, but it pays off knowing I'm on my little node of the decentralized internet.
Hosting my own instance on my server just because I can. And I have resources.
If your ISP can give you publicly routed IP address - you can host it too, right from your home!
I was thinking of doing it so certain communities from the other place would feel welcome, but someone is domain squatting what I was planning
It's cheap enough that I can pay for it, and I feel like it's a valuable service to provide.
Itβs WAY faster than sharing an instance with normies. Think of it as your own personal caching server.
As for payment, you sign up to a VPS provider and give them your credit card, and pay for the usage.