Technically, XZ is just a container that allows for different compression methods inside, much like the Matroska MKV video container. In practice, XZ is modified LZMA.
There is no perfect algorithm for every situation, so I'll attempt to summarize.
- Gzip/zlib is best when speed and support are the primary concerns
- Bzip2 was largely phased out and replaced by XZ (LZMA) a decade ago
- XZ (LZMA) will likely give you the best compression, with high CPU and RAM usage
- Zstd is... really good, and the numerous compression levels offer great flexibility
The chart below, which was sourced from this blog post, offers a nice visual comparison.
If you have a system with long-running leaky browser instances, Alt-SysRq-F is a lifesaver. It calls oom_kill, sacrificing one process to save the rest.