The Mastodon social network is composed of individual Mastodon instances that connect to each other using a common protocol (ActivePub). As I wrote yesterday, one downside of this approach is that one of the servers disappears from the network, the profiles and data of all the users on that server are lost.
If Mastodon were composed of just one instance, then all users would reside on that server. Mastodon would be similar to Twitter, in the sense that Twitter is a centralized service.
On the other side of the spectrum, if each Mastodon user had their own instance, there would be as many servers as users. Each user would have total control over its data. However, server load in Mastodon is not only a function of the number of users of the instance but also of federation. If you have many followers and participate actively in conversations, posting something that becomes popular could bring your server down.
Single-user instances are ideal if you prioritize owning your data and making sure your content on Mastodon is persistent. However, the cost of running the service will grow rapidly and you’ll have no one to dilute the fixed costs with. Probably a better strategy is joining a mid-sized instance, even if you have to pay for it.
(If you want a deeper look at what means running your own Mastodon instance, this is an interesting post.)