What a Minecraft server actually is
A Minecraft server is a program that runs the world for everyone. It loads chunks, moves mobs, saves builds and passes every player's actions to everyone else. Your friends' games connect to it using an address, such as an IP and a port or a domain name. To keep the world available when you are offline, that program has to run on a computer that stays on all the time. Hosting is simply choosing which computer that is.
Hosting at home vs paying a host
You can run a server on your own PC for free. To let friends outside your house join, you usually need to forward a port on your router, which shares your home IP address with every player, and the PC has to stay on whenever anyone wants to play. A hosting company runs the server in a data centre instead: it is always on, you get an address straight away, and you manage everything from a web panel. For most groups of friends, hosted is less hassle.
RAM basics
RAM holds the parts of the world that are loaded, plus every mob, item and plugin. More players spread far apart load more chunks, so they need more RAM. Big modpacks need far more than plugins do. As a starting point, a small Paper server for a few friends runs on 1 GB, and 2 GB is a comfortable start with a handful of plugins. Forge modpacks need at least 2 GB and often much more. Giving a server far more RAM than it needs does not make it faster, so size up only when the memory graph says so.
CPU basics and lag
Most of Minecraft's game logic runs on one main thread, so a fast single CPU core matters more than lots of slow cores. The server aims for 20 ticks per second (TPS); when it drops, players see lag. Common causes are large mob farms, redstone clocks, too many loaded entities, and players flying into new terrain, which forces chunk generation. Lowering view-distance and simulation-distance, limiting farms, and pre-generating the world with a plugin such as Chunky help a lot.
Server software: vanilla, Paper and friends
Vanilla is the official server from Mojang: no plugins and no mods. Paper is a faster version of the server that runs Bukkit and Spigot plugins, and it is the usual choice for survival servers and SMPs. Purpur is Paper with extra settings. Fabric is a lightweight mod loader, and Forge or NeoForge run large modpacks. Plugins only need to be on the server, so players join with a normal game. Mods usually have to be installed by every player too.
Plugins worth knowing
A few popular, free plugins cover most beginner needs: EssentialsX for homes, warps, spawn and kits; LuckPerms for ranks and permissions; a land-claim plugin such as GriefPrevention so players can protect builds; CoreProtect to look up and roll back griefing; and Geyser with Floodgate if you want Bedrock players to join. Download plugins only from their official pages (Hangar, Modrinth or SpigotMC), keep them updated, and avoid stacking dozens you do not use.
Backups, before you need them
Worlds get griefed, plugin updates go wrong and files occasionally get corrupted. A backup turns any of those into a five-minute fix instead of a lost world. Take one before every update or new plugin, schedule automatic ones, and keep a copy somewhere other than the server itself by downloading it now and then. On ESN, the Backups page creates and restores backups, and the Schedules page can run them for you automatically.
Settings that matter
Most settings live in server.properties. motd is the message in the server list. difficulty, gamemode and max-players do what they say. view-distance and simulation-distance have the biggest effect on performance. white-list lets only invited players in, which is a good idea for a private friends server. Keep online-mode set to true so players need a real account and nobody can log in under someone else's name. Restart after changing the file.
Step by step: your first server on ESN
Go to panel.esnoffical.com and sign in. Open Buy a server, choose Minecraft, then pick Paper (the usual choice). Choose a plan with at least 1 GB of RAM; Advanced (2 GB) or bigger is a comfortable start. Pay on Stripe and the server is set up automatically. Open it, press Start on the Console and accept the EULA when asked. Wait for "Done", copy the ip:port shown at the top of the Console, and add it in Minecraft under Multiplayer, then Add Server.
Become an operator and invite friends
In the panel Console, type op followed by your Minecraft name (no slash) to get admin commands in game. Share the address with friends, and turn on the whitelist with whitelist on and whitelist add Name if you only want invited players. If a friend helps run the server, add them as a subuser in the panel instead of sharing your password. If some friends play on phones or Windows Bedrock, add Geyser and Floodgate so they can join too.
Keep it safe
Use a strong, unique password on your hosting account and turn on two-factor authentication. Never install cracked or re-uploaded plugins, which are a common way to get backdoors. Give operator status only to people you trust, since ops can do almost anything. Keep the server software and plugins updated, and read the console after updates for errors. These habits prevent most of the problems new server owners run into.
Where to go next
Once the server is running, the ESN docs cover installing plugins, how much RAM you need, fixing lag, uploading an existing world and letting Bedrock players join. ESN plans start from $0.50/month, and every Minecraft plan is listed on the panel with its RAM and price. If you would rather just play right now, ESN SMP is open at play.esnoffical.com for Java and Bedrock, and the ESN Discord is the place to ask questions.