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The performance target of "linux desktop running lxd" and the price tag "not crazy expensive" is not very clear...
I would personally look for a fanless barebone pc and equip it with as much RAM and storage as you like. One example for this could be the Zotac ZBOX CI629, which you can get for around 400 Euros and has a 13th gen Intel i3 built in.
Is this within your budget?
Yes i would say 1000-1200euro tops for the budget with option to add more ram later. Would you think i3 is enough? I am not too familiar with the newer generations
Even a raspberry pi can run linux with an lxd desktop, and this i3 is a few times faster than a raspberry pi. But it depends on what you want to with it...
Correction, Raspberry pi zero can run lxd, been there done that. So if that's all OP wants a $10 computer should do it, he really needs to be more specific.
I need it for normal desktop use. Email, coding, browsing (no gaming)
Then you probably don't need 32 GB RAM, unless you've measured actual in-use RAM and found that you need it. Halve it to 16 GB and you'll probably find more options.
I have built mine this way, reusing a very old 'normal' tower case:
Take a CPU with limited TDP, like 35W or 65W. Use a passive CPU cooler. Use a semi-passive power supply that is too strong for the actual need, so it's going to stay in it's passive state all the time - they are cheaper than the real passive ones.
Then use 1 really large fan (25 or 30 cm) that goes at the side of the tower case. It turns very slow because of it's size, so it is nearly inaudible. No other fans.
You can get 12V power dividers that plug into a 120 watt laptop adapter, if you keep your energy requirements down it saves quite a bit of space, noise and cost
I need it to be completely without fans due to the location where I need it.
Look up industrial mini PCs maybe?
If you're putting it in a box it is going to cook itself to death regardless of its need or lack of need for fans. If you're putting it on a dirty floor convection is going to move the dust into it anyways.
If youre putting it in a shop, consider hardware purpose built for that.
OK. Then you have to think very differently.
Decide on the case first, and it's going to dictate most of your further decisions.
For example, you cannot use a simple passive CPU cooler in a standard case without any fans, because they need some reasonable air flow all the time. I would guess you need heat pipes instead, and coolers on the outside - but I have no actual experience in that area.
Monsterlabo makes fanless cases, almost all heatsink, with upward airflow. There is another bramd where heatpipes attach to outerside aluminum finned panels, but I forget the name
I just picked up a Monsterlabo: The First, it is all heatsink for the top 2/3rds so your CPU and GPU are completely fanless, I'm searching for a fanless PSU now. It will be a dead silent PC.
Lenovo M90n or similar
fanless nuc with i7 is ~600€
Have a look at Serve The Home
(IMHO - more specifically their youtube channel)
They did a load of reviews "recently" (months ago) and I ended up buying a fanless / passively cooled box with multi-Gb NICs that is serving me well.