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I run a node from home. I use --rpc-bind-ip as a daemon flag, with my internal/LAN IP address as the argument. With this setup, I can access my node from wallets on different computers inside my LAN. When others ask this question, I've seen advice to bind to 0.0.0.0, and I've seen advice to bind to loopback (127.0.0.1) (mainly when you'll connect somehow through hidden services, apparently).

How does monerod behave differently with different bindings? Would the recommendation for which one to use change if the Monero node were be run on remote VPS rather than as a home node? Would the recommendation change if running a home node that is meant to be accessed from outside the LAN?

If loopback is strictly for hidden services, then that's probably outside the scope of this question, since I'm mainly curious about binding to 0.0.0.0 versus actual, internal or external IP.

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This is a basic networking question, not specific to Monero.

0.0.0.0 means "any address" - it will bind to every network interface on the machine. So it will listen to requests from anywhere.

Using a specific address means it will only bind to that single address.

Using 127.0.0.1 is the loopback address, so it will only listen to requests originating on the same machine.

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