Matrix vs XMPP
Matrix is the newer, more feature-rich protocol — federation, rich media, end-to-end encryption via Megolm, bridging. XMPP is older, more lightweight, and has better battery life on mobile. For most communities Matrix is the right choice; for technical/IRC-like communities XMPP is lower overhead.
Resource planning
Synapse (Matrix): 2 GB RAM minimum, 4 GB for 10–50 users, 8 GB for 100+ users. Dendrite (Matrix) is much lighter. Prosody (XMPP) runs comfortably on 1 GB RAM for 100 users. VPS-S covers XMPP, VPS-M covers small Matrix, VPS-L for serious Matrix.
Privacy considerations
Self-hosting removes the commercial homeserver's knowledge of who you talk to. Your server knows — but your server is in a jurisdiction you chose, under a legal framework you trust. Switzerland is the canonical choice for chat server operators; Iceland is a strong alternative.
Best jurisdictions for chat servers
Switzerland for FADP, Iceland for free speech, Romania for budget.
Iceland
Free Speech HavenStrong privacy laws, renewable energy, outside EU.
Panama
No Data RetentionNo retention laws, no MLAT with most western countries.
Romania
Anti-RetentionCourts struck down data retention laws. Great EU connectivity.
Switzerland
Premium PrivacyStrict privacy laws, political neutrality, top-tier infra.
Recommended chat server plans
VPS-S for XMPP or Dendrite, VPS-M for small Synapse, VPS-L for serious Synapse.