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The Electronic Frontier Foundation wrote a pretty good blog post on the legality of the Fediverse, around the time Mastodon was getting popular. It probably applies to Lemmy too. It’s worth a read to familiarize yourself of what kind of legal things you’ll be getting yourself into. You’re on the right track; you can control you and your friends’ content, but you can’t control remote content that gets pushed to your server and that’s the part to worry the most.
https://www.eff.org/deeplinks/2022/12/user-generated-content-and-fediverse-legal-primer
One thing that stood out is to register yourself as a DMCA agent. It costs $6 or something. Having an agent on record gives instance admins certain protection.
I seem to recall from reading a GitHub issue that a public cert and private key is generated for your user account upon creation. Once you start federating and interacting with other instances, the cert is distributed. When you delete the instance and start all over from scratch with the same username, now there’s a different public cert and the remote instances no longer trust your username.
I’ll try to find the GitHub issue that discusses this issue.