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2) disk files are saved, one for the world, one for the character. items can be ON you or IN the world, and are saved appropriately. 'Progression' is BY WORLD and by character.
Your char remembers what it learned in terms of crafting recipes and has its gear on it; the world remembers what bosses you have killed. Both files have an auto backup but I suggest doing your own as well if you care about your stuff.
3) it can be turned off when not in use.
4) only if you let them know your server password or make it easy to hack. See #2 -- if you have a backup after each session any foolishness can be undone.
There's a server manual when you download the dedicated server, it'll show you the various options you have to run the server, including how to set-up a password and make your server invisible to the community list, so you won't be bothered by other people.
And don't worry, it about 3 pages long.
I have 16 gig as well. As games get more memory intensive, for future proof its better to just spend the money and get more ram like another 16gig to 32. I also got a dedicated game server for valheim and it solved a lot of issues.
If your in valheim for the long haul 18-20 bucks a month for up to 64 players is not a lot to pay for game stability and piece of mind. The game can get laggy on a virtual your own server that you have to shut down and open everytime you play. Just something to think about.
My best advice is to try and find a summer job to save up around 1800 to 2500 United States dollars to build a new PC and keep the one you are currently using as the server.
Your GPU/Graphics is not used by a server.
Your RAM could be an issue. Reason i say this is because everything you see in the game is saved to RAM. Now add in everything the other 3 people see in the game and well I think you get the point. If you doubled your RAM or even add 8GB I think you would do okay based on what my Server Hardware uses and what my Client uses.
Sadly I am not sure on the internet honestly my hardware has a 1GB connection both directions.
What I can tell you is that if you and your friend want to play G-portal is an excellent host.
At the same time OVH will allow you to get server hardware like I have that allows to run any game you want. Once you install Win OS on the hardware it will look the same as your PC. You connect through Win Remote Desktop that comes with WIn OS. Now we have a higher end box/hardware paying $90 but split that 2 ways. So if you do the math on splitting 3 ways could end your want for ever needing a host for any game. Most games you can run a server either with a manager or they are easy to setup.
If you do try to set up a server on what you have keep in mind that to start you could be fine. When you start getting to mid-late game you could run into some issues as you and friends would be spread out more perhaps, your building would be much larger.
To set up a server and have ease of update I suggest checking out this link.
https://valheim-server-help.github.io/installWinSteamcmd/
Simplifies setup.
Ryzen is built for current Gen, not old Gen RAM.
The prices are so high you can buy a car instead of a PC
(Not enough Chips on the market + Extreme high demand thanks to home office)
A CEO of a company like apple said he dont expect the prices to go back to normal before 2022