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Selfhosted
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Doing it on a VPS you're not going to be able to do real-time transcoding, so you'll have to pre-transcode a bunch of different bitrates.
Peertube will do that for you, and also handle giving a nice interface for people to watch the videos on with multiple quality levels to pick from.
I don't know of any services that automatically pick the quality based on your connection quality though, even youtube doesn't do that.
Are you sure Youtube doesn't pick video quality based on connection speed? It will frequently drop down to 360p when my connection speed is particularly shitty that day, and I'll have to manually increase it (I'd rather have occasional buffering than a blurry mess).