How "heavy" is self-hosting matrix really?

Hi. I'm kinda of a noob in the world of self-hosting and matrix, for that matter. But I was wondering how heavy is it to host a matrix server?

My understanding how matrix works is each participating server in the room stores the full history and then later some sort of merging happens or something like that.

How is that sustainable? Say in 5 years matrix becomes mainstream and 5 people join my server and each also join 3 different 10k+ people rooms with long histories. So now what I have to account for that or people have to be careful of joining larger rooms when they sign up in a smaller-ish server?

Or do I not understand how Matrix works? Thanks.