Since I'm also in the high-availability game (for shop servers) you first need to define what 500 - 1000 users actually means.

Yes, you can have 1000 users on any site easily, the question is how many users "call for an action on your server" at once, or in other words, how many users query your database in a single second. I learned the hard way that "real" 1000 users are a lot to handle for any single server setup - and I rented servers that cost $100 per day. Here the bottleneck becomes the database.

But even if you rent the largest Amazon or Google SQL cloud server (flatrate of around 40$ per day - just for the database) you can only have max. up to 4.000 read/write requests per second.

So let's assume 1.000 people are on your blog at the same time. Reading here and there, leaving comments etc. What really happens is that you maybe have around 100 people (out of 1.000) who actually call your server at the very same moment, while the majority of people will request new content a few seconds earlier or later.

So 1.000 people on a blog - I'd say you're very fine with an optimized 10$ LEMP stack incl. MariaDB or Percona for MySQL. Get a free CDN on the side, lean back and enjoy the show :)

Should you bet your life on this? No, but this is my personal conclusion after researching this topic for nearly 2 weeks now.

I'd recommend looking into:
https://www.digitalocean.com/community/tutorials/initial-server-setup-with-ubuntu-14-04
https://www.digitalocean.com/community/tutorials/how-to-install-linux-nginx-mysql-php-lemp-stack-on-ubuntu-14-04

P.S.: When you select your server make sure it's in the same region as the majority of your readers. This will not only make a difference in cutting down loading times but also in SEO.