The "just use a VPS" crowd glosses over something that matters a lot. In 2021, DigitalOcean complied with 1,847 law enforcement requests and terminated accounts on 23 separate government orders without notifying the account holders first. Hetzner's ToS explicitly prohibits cryptocurrency mining and has nuked nodes that looked like they were running consensus software.
The actual sovereignty spectrum runs: VPS (landlord can evict you) > colocated hardware (landlord holds the keys but you own the box) > home server (you hold everything but your ISP can throttle) > mesh network (nobody can stop you but latency is rough).
For a Lightning or Bitcoin node specifically, the kill shot is that your VPS provider can image your disk while the node is running. Hot wallet keys sitting in memory get captured in a snapshot. Running a node on hardware someone else physically controls is roughly equivalent to storing your seed phrase in a shared Google Doc.
The "just use a VPS" crowd glosses over something that matters a lot. In 2021, DigitalOcean complied with 1,847 law enforcement requests and terminated accounts on 23 separate government orders without notifying the account holders first. Hetzner's ToS explicitly prohibits cryptocurrency mining and has nuked nodes that looked like they were running consensus software.
The actual sovereignty spectrum runs: VPS (landlord can evict you) > colocated hardware (landlord holds the keys but you own the box) > home server (you hold everything but your ISP can throttle) > mesh network (nobody can stop you but latency is rough).
For a Lightning or Bitcoin node specifically, the kill shot is that your VPS provider can image your disk while the node is running. Hot wallet keys sitting in memory get captured in a snapshot. Running a node on hardware someone else physically controls is roughly equivalent to storing your seed phrase in a shared Google Doc.