It probably depends on the load? It's a Rails app AFAIK so if the load is low (which is likely for a family or group of friends) it should be able to run anywhere.
If you don't federate (and so only receive toots from accounts you've explicitly followed, or who mention you or their shares/boosts) and you don't follow a huge number of highly active accounts, then maybe.
1. For anything where you are mentioned specifically, or where you're a follower, the toots gets distributed automatically.
2. For anything where the toot is marked public but you are not a follower or mentioned, your instance will only receive a toot if you've explicitly configured federation of the public feed with one or more instances that is reasonably well connected.
The former is "cheap" unless you follow lots of people. The latter is like sucking on a firehose, because you get pretty much everything. If you do, it matter relatively little how large your userbase is, because you're still processing nearly every public toot.
