What do you want to do with it? I mean, that really determines the hardware.

Consider the following use cases:

• If you’re trying to do a media server to serve video and audio files up to other devices around the house, then access time probably basically doesn’t matter, and rotational drives are fine, and CPU capacity is probably irrelevant; you only need to stream at the media’s speed, and there isn’t a whole lot of seeking, and there’s no computation. You need the system to be running at all time. Expandability, other than storage, doesn’t really matter.

• If you want a backup server, then you’re probably in a similar situation.

• If you’re trying to do a box to run LLMs, like a headless Stable Diffusion server, then you probably want a very beefy GPU, and enough storage space to store the relevant content, but you don’t need massive amounts of storage. CPU doesn’t matter much.

• If you’re trying to do a firewall, then unless you have really elaborate processing requirements, CPU probably doesn’t matter. You are going to want at least two network ports. Keeping power usage low is probably desirable.

• If you’re doing a home automation server, probably similar (though you don’t need network ports).

• If you’re trying to have a box that runs VMs, then a bunch of memory and a beefy CPU, not to mention probably SSDs is likely desirable. Limiting power use probably isn’t that important.

There are applications for which a Pi is completely reasonable, where you’re using very little power and just need to keep the box always available. But there are applications for which it’s unreasonable, too – it’d make a bad VM-hosting box.

Like, if you say “I plan to do X, and Y and I’m thinking that I might do Z”, and maybe give some kind of a desired budget, that’ll probably get you more-useful advice.

First I wanted to do it on a Raspberry Pi with an external hard-drive but then I read USB connected drives are unreliable and so on.

I don’t know about unreliable. I’ve never had problems with USB-attached storage just not working. But I do have one enclosure with about five drive bays that doesn’t have an option to return to the previous power state on power loss – one has to tap the power button – which is incredibly obnoxious, as if it loses power and I’m away, I can’t bring it back up. That wasn’t something that I’d anticipated being an issue, and I’d suggest that anyone getting one for a system that they intend to use remotely check that such an enclosure does have such functionality.