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How does paid web hosting work?
There are only three ways to pay when hosting your website. Shared web hosting is known for being the cheapest solution. This is because your website is sharing a single server with several other websites. In most cases, this is more than sufficient, but a dedicated server will also work for sites that garner a high level of traffic. This would mean that your website is the only website on a server. However, the server that you'll use will still owned by someone else. Last but not least, you can get a co-located server, this means you actually own it but you'll still have to pay to have someone else house it. See Web Hosting FAQ here