Local vs remote MCP servers: which one you actually want

There are two kinds of MCP server, they solve different problems, and almost nothing tells you which one you are building until you are deep enough in to have already made the wrong choice. I worked this out from a submission form. More on that below, because it turns out to be the clearest signal in the whole ecosystem and it is buried in a footnote. The two shapes Local (stdio). The server runs as a process on the user's own machine. The client — Claude Desktop, Cursor, whatever — spawns it and talks to it over stdin/stdout. It is a package the user installs. Remote (Streamable HTTP). The server is a service you host. The client connects out to a URL with a token in an Authorization header. Nothing is installed locally. That is the entire distinction, and it determines everything else. What actually differs Who runs the code. Local: the user, on their hardware. Remote: you, on yours. This is the real decision. Everything below follows from it. Where secrets live. Local servers read credentials from the user's own environment — their shell profile, their config file. You never see them. Remote servers require the user to hold a token you issued, which means you own the entire credential lifecycle: issuing, scoping, rotating, revoking. What the server can reach. A local server can read the user's filesystem, hit localhost, talk to their Docker daemon. A remote server can see none of that, and should not want to. Update path. Remote: you deploy, everyone is on the new version immediately. Local: users run whatever version they installed, possibly forever. Failure surface. A local server fails on one machine. A remote server fails for everyone at once. Pick your poison. Choosing Local if you need the user's filesystem, local processes, a local database, or hardware. Or if the data must not leave their machine. Remote if the server fronts a service you already run. If your MCP server's job is to call your own API, making users install a process that proxies to your HTT