this post was submitted on 12 Jun 2023
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Sometimes if the instance creator has certain restrictions (rare). Also it affects what posts show up in the "Local" tab (posts from communities that are hosted on that instance). In the "Communities" tab it will show communities that people on your instance are subscribed to. If your instance goes down, you will lose your account I think.
Most of the time your home instance does not matter
I am very sure there is or will be, like Mastodon, a way to backup your profile and/or move instance where its hosted.