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Is it possible to host a Minecraft multiplayer server on my computer and connect to it from the game client on the same machine? If it is possible how would it affect other players connecting on my LAN?

My computer has a quad-core AMD chip, a NVIDIA 9800 GT, and 4GB of DDR3. I'm running Ubuntu 10.10 x64. My LAN is all wired 1000Mbps.

Edit: Additionally there would be a max of three or maybe four players on at any given time, all via the LAN.

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up vote 8 down vote accepted

Yes, I've done this with a much less high-powered PC and about 8 or 10 users connected. It worked fine.

The biggest problem with Minecraft servers (apparently) is that if your players explore too far, your memory footprint will get ridiculous at some point. I didn't see any problems in this area, though - most of my players stayed near the spawn for the most part.

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