Many folks running instances take donations. Folks are happy to toss up a few bucks to help cover costs. Similar to how people are happy to hop on patreon and support whatever creators on a monthly basis. That's where a lot of the core mastodon money comes from. There's also grants from orgs and governments too to contribute.
This isn't a new concept, and the internet has always had services that worked like this. Usenet, mirrored file repositories, etc. It wasn't until the early 2000s that many things started to become centralized, and we see how well that's worked out.
Are you calling the server list on joinmastodon.org “the federation”? Because it’s not; it’s literally just a list. Nothing about the list tells you about any actual federation between instances. Without a doubt there are instances on that list that are federated with ones not on that list and vice versa. It’s not even the only list out there.
$2000 a month? Not sure what kind of workload you’re thinking of. You can run an instance with several thousand users with pretty minimal hardware.
Decentralization is a matter of structure. There is no central “federation” that you speak of that can blacklist you. Getting defederated from an instance isn’t a collective descision, it’s up to the individual server owners to decide.
And the odds that you work hard to build a server up and then find yourself defenderated by all major instances is incredibly small. Normally indicates that the server is actually a pretty toxic.
Renting unlimited bandwidth is not cheap with higher storage. Btw an 8gig Ram rig with 5TB in data storage will run you about $2,000 with mid grade motherboard etc… plus $500 a month for a 30Gbps pipe.
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