Public image hosting sites are big business – players like imgur, CloudApp, Photobucket and others are in the race to get your pictures and screenshots. These services are all great and convenient, but they likely come at a price: they have rights to your images , they collect private user information [2, 4] and you can't just delete your images when you want . Wouldn't it be great to setup your own private image sharing service on the cheap? Let me break it down for you so you don't have to depend on these sites to share images or screenshots.
This post is intended for users on OS X 10.8.0 or later
So why exactly might you want to avoid some of these services while sharing your images? Well, most of it boils down to:
With regard to any file or content you upload to the public portions of our site, you grant Imgur a non-exclusive, royalty-free, perpetual, irrevocable worldwide license (with sublicense and assignment rights) to use, to display online and in any present or future media, to create derivative works of, to allow downloads of, and/or distribute any such file or content. 
Yes technically Amazon does host all the data you have on your account. However, this is very different from image hosting providers because you retain ownership and control over your data (e.g., to delete it on your terms). With other providers you often have to file a deletion claim  and you don't know how many times that file has already been copied by the service.
Step #1: Setup an Amazon Web Services account.
It's straightforward to actually create a new AWS account so I'm not going to walk through that. Once you sign up, you'll be able to access the same resources used by some of the largest social networks and technology companies in the world. This means that not only will you be able to share your images, but you don't ever have to really worry about mass amounts of traffic taking down your host.
Step #2: Make a user for uploading
What this really means is make a Access Key that you'll use for authenticating when uploading images. First you'll have to make a new user (with privileges to upload images), it might be a good idea to give it the a name like my-image-uploader. Once you have a new user in there, you'll see a Security Credentials tab down at the button. In there click the Manage Access Keys button and then Create Access Key. You need to download it, memorize it or do something so you don't lose it as you'll need the Access Key ID and Secret Access Key again in Step #4.
Step #3: Make a S3 bucket
From the Services drop down you'll see the following list of available services to choose from. We're interested in S3 (Scalable Storage in the Cloud) under the Storage & Content Delivery section.
Once you're on the S3 page, click the big button in the top left that says Create Bucket. You'll then be prompted with a modal asking you to provide a name for it, you can name the bucket whatever. However, please know that when you share images this name will be visible.
In future posts, I will detail out how to provide a nice and pretty domain name for your image host.
So at this point you'll see your newly named bucket will appear in the list. Click on it and you'll be taken to a more detailed preview page. At this point I would recommend adding a folder called ss (i.e., Screen Shots), uploads, or similar to help you organize what goes in here in the future.
Step #4: Shell out $3 for Captured
Trust me, just do it and you'll thank me later. Once you have it installed from the Mac App Store and running you can click the toolbar icon to access the Preferences. Head over to the Advanced tab and make it look something like this:
This is where you need to put in the Access Key and Secret Key from Step #2. For the bucket name, you need to name it the exact same as you did on AWS. Additionally, if you made a subfolder to organize the images in append to the bucket name as shown.
Captured will randomize the name of the uploaded images so you don't have to worry about someone randomly guessing them and finding private or photos that you don't want public. If you want to be extra careful, go ahead and bump up the File Name Length value.
Now close the window and you'll be able to do Command + Shift + 5, and then optionally Space to take a screenshot. If all goes well the Captured icon will change colors and your clipboard will automatically be filled with the url of the image to share so you can send it without any additional clicking or highlighting! That's really it – you have at least 1 year free of image hosting (up to 5 gigs of small screenshots is a lot) that can handle any traffic you throw at it and then it might be pennies by the month depending on how large or popular your hosted images are after the first year. Additionally, you're free to delete any images you've uploaded right from the AWS S3 interface.
Got questions, not working or just plain wrong? Relax, put down your computer and enjoy the rest of the day – then ask me a question later and we'll figure it out: @x0xMaximus