LXC vs VM for Docker on Proxmox: Key Setup and Firewall Lessons from a Home Lab

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A developer repurposed an old i7-7700 machine with 15GB RAM as a Proxmox-based home lab for automation and agent workloads. The central architectural decision was whether to run Docker inside LXC containers or full virtual machines, with the choice hinging on isolation needs versus performance trade-offs. LXC containers share the host kernel and offer near-native speed with minimal memory overhead, while VMs provide stronger hardware-enforced isolation suited for untrusted workloads. Running Docker inside unprivileged LXC requires enabling nesting and keyctl in the container config rather than defaulting to the riskier privileged container mode. The author also highlights that Proxmox's datacenter-level firewall rules are frequently overlooked, yet are more consequential than per-container rules in securing the overall setup.

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