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You can take a look at the demo version of Minecraft. Yes, you will need one username for each player. Also, take a look at MinecraftEdu They offer Minecraft to schools for 50% off the retail price.
Probably you are inside the spawn protection radius and that is why you can't break blocks. When there are no ops on the server, spawn protection is disabled, that is why you can break blocks when there are no ops defined. For more details, see Spawn protection and server.properties (search for 'spawn-protection')
Minecraft Demo can be used to host LAN, but it won't connect to a LAN server other than itself. So the only way to play Minecraft multiplayer without a paid account is to play the classic mode. It is, however, very old and only includes creative mode and limited maps. For the actual up-to-date Minecraft, you need an account for each user. There seem to be ...
The current regular version of Minecraft intends to have one license/account per player, but no license is needed for the server. Therefore, the only expense to make this happen, beyond server hardware, is Minecraft accounts for any player who does not already have one.
Provided you have the tools to install the game server you want (programs from the games sites) and you know what operating system it requires, you can opt for any hosting platform like any other website. Be careful on the banswidth you are allocated and the machine specifications. Depending on the number of player you intend to host games for, it may ...
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