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It's like having different email providers.
They will all send and receive email, although some might try to cut down on spam by blocking email from other specific providers.
Also, certain providers will host different email newsgroups (ie communities, ie "subreddits")
The difference is different admins, different policy (for example one lemmy could let anyone in, another, like beehaw asks to write why they should let you in, and that you will obey their rules).
There are also things like some settings, for example beehaw disables downvotes, they also don't federate with lemmy servers that notoriously break their policies.
So best bet would be to choose server which policy fits you the best.
Also some people might want to choose the biggest and most open server. That could be good but because the server is open to everyone it might struggle fighting abuse and also go down because of high load. Such server is lemmy.world right now.
BTW: this might be useful https://github.com/maltfield/awesome-lemmy-instances
Similar to Mastodon, the different instances can represent single individuals, a small group of friends, a shared common interest, or host anything. It allows a “local” feed but can also connect to any part of the federated network. An instance might even choose to not broadcast to the larger federation at all.
These instances also spread out the workload of any single server by decentralizing the network, which allows Lemmy to grow without falling into a capitalist growth method.
That's fuckin' awesome! Kind of like a digital syndicate!
On Hexbear you get to look at dope ass bears all day. 
That's a dope ass bear right there
Fuck yeah it is. 
This is an excellent case in point — for most instances there kind of just, somebody felt like making an instance and here it is. If you don’t know anybody specifically there’s not much reason to pick one over another. Maybe in future somebody will start up commercial instances like email providers and charge extra to have better reliability or a cool name or whatever but so far the instances seem to be pretty much run for the sake of neighborly kindness and fun.
Some instances have enough of a special interest that they get a distinct identity and reputation.
If you go look at what’s posted/hosted locally on the hexbear instance you’ll see it’s got a shit-ton of general trolling, shit-disturbing, lib-pwning, and general 4chan activity. If that’s your jam, you can sign up there and have a “local” feed with that kind of content, concentrated.
Meanwhile I’ve seen a number of calls to defederate from hexbear recently and if you sign up there you will not see or interact with whomever is posting from those instances who say no to trolling.
If you go look at what’s posted/hosted locally on the hexbear instance you’ll see it’s got a shit-ton of general trolling, shit-disturbing, lib-pwning, and general 4chan activity. If that’s your jam, you can sign up there and have a “local” feed with that kind of content, concentrated.
4chan activity? I mostly post ska.
Every day, too!
Is there an opportunity for ad monetization as a commercial instance? Because so far I haven't seen any
I think (don’t quote me on this, because I’m not sure) that the license agreement for kbin/Lemmy instances specifically forbids advertising. Then again, maybe I’m remembering an incorrect remark that some doofus made. I don’t know.for sure.
It actually completely allows it as it is AGPL. The only condition is that you need to release the source code to any users of the service.
In practice it's hard to keep advertising working while allowing third party applications.
I was talking about charging subscription fees for the instance login, not ads. I imagine if you wanted to fork lemmy and change it to inflict ads on your instance users you could do that, too.
I’m not thinking it’s an awesome business proposition right now, but if the fediverse gets big enough that users are willing to pay for Enterprise Reliability™ then I could see it happening.
It used to be that you could self-host your email server or use your cool friend’s server. But these days almost everybody uses commercial hosting. I see lemmy and mastodon going the same way if they grow enough.
People would probably pay for exclusivity, however one chooses to define that.
For ONLY $50/month YOU can join the elite! Act now!
You know how on Reddit people were always bitching about the mods or admins? With federation, you can choose your mods and admins. Still won't stop you from getting banned from certain communities, but if mods take it too far, you can just start a community on a different server.
Like a democracy or what? Lol. How do you choose them?
I kind of like the idea of someone “campaigning” to be a mod. It could be a highly entertaining shitshow.
Can you imagine a debate between candidates? Lmao
The instance can control it and another instance can create a "competition" of the same instance. Diffrent mods for each and not being locked to 1 type.
Though hopefully we get something similar to supper communities that are multiple of the same under 1 listing
That's the beauty of it! Just like email, it doesn't really matter which provider you sign up through. It gives you choice.
However, some instances do de-federate from other ones meaning you wouldn't be able to see any content from communities hosted on them nor anything posted by their users.
My instance doesn't seem to allow me to see downvotes. Makes the place seem nicer, but leaves me only ratioing to determine if something was disliked