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Is it possible with Matrix to run your own server but let Matrix.org handle authentication? I always thought for many that's probably best of both worlds.

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What benefits does this have? You'll still have to have a server running and you lose control of your account, if I'm understanding what you mean (letting matrix.org handle accounts).

User friction. My problem is this: I'm in a bunch of Discord Server/Guilds but watching Discord Inc., it's clear that they are ZIRP powered and it might come crashing down in massive fireball. However, if users have 5 separate logins, they are not going to convert over.

I realize the implications of "What happens if you get Matrix.org account banned?" but that's next week problem.

It’s federated anyway, similar to email. One account can take you anywhere, so if you make your own "guild" the users could just directly participate from matrix.org (or any other home(server))

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