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On your own VM in the Federated cloud. But we can't see your data, once your change your passwords. We can only keep your software up-to-data, initiate the encrypted backup. No, it's not as private as true self-hosting, but it provides the right mix of convenience and privacy.
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How do you keep the software up-to-date if you don’t have access to it. Seems sus
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We use macaroons to give us access to the parts of the system required to keep the software up-to-date.
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So, not really 100% private then, is it? Who's cloud is it anyway? (there is no cloud, just someone else's computer :-)) I can run free VM on google and ecrypt my drive (with my own keys BTW) How is this service better? $40 ain't cheap I wish you luck but I ain't buying...
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Yes, everything you say is true. And you're responsible for running that system. Most folks don't want that. It's OK to offer a convenience. BTW, are you running your own email today? Are you running your own Jitsi today? Etc. If not, why not? That's the value offered by Federated.
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