I would go with 16GB for the kinds of things you listed.

If you don’t need a 3.5in drive then I would go even smaller to a mini form factor. It will definitely save you money on electricity. I think it’s the main choice here.

Key-only SSH with fail2ban and I sleep easy a night.

I would go for refurb, business line SFF machines. Something like ThinkCentre or Optiplex. Specific form factor based on drive needs but the smaller you go the more power efficient. I have one on the bigger side (internal psu) that runs about 12W idle.

Just double check that it can handle hardware transcoding. Should fit right in your budget!

I use Immich for sharing. Get some accounts set up for closest family so you can easily add them to albums. For others you can just share a link to each album, password protected or simply unlisted.

Personally, I run my internet accessible apps on my Hetzner VM behind a reverse proxy, whereas things like home automation, DNS and Octoprint I prefer to serve on my local network.

Same as any piece of software you’re hosting, it’s up to you to decide. I run my instance on my Hetzner vm.

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You can always set watchtower to blindly pull for you. If it’s going to be broken anyways, might as well automate the process.