Basically, but it is not seamless. The biggest hurtle is that when you stand up a new instance, you will only see posts and comments from after the instance was created. This is the way most federated social media works. The rationale is that it would be too burdensome (for both ends, the massive established instance, and the small upstart instance running on a budget VPS), and prone to DOS abuse, to request the entire history from every instance in the network. The initial experience on a new instance can be a little barren. After a while, when it has discovered other instances in the network and had time for new posts to roll in, it starts to be natural. This doesn’t happen automatically though. Actions must be taken (following a user, subscribing to a community, etc) for these connections to be made. The first actions must be deliberate, but it eventually begins to snowball with user activity.

When I started up my Mastodon instance, I had a bunch of friends, some situated on the network already, some newbies joining in, all follow each other and recommend other accounts to follow. Within a day, 400 instances had been discovered. Months later, it has discovered over 12,000.