Cook the Bacon:
In a large pot or Dutch oven, cook the chopped bacon over medium heat until crispy. Remove the bacon with a slotted spoon and set aside, leaving about 1 tablespoon of bacon fat in the pot.

Sauté the Aromatics:
Add the diced onion to the pot and sauté until translucent, about 3–4 minutes. Stir in the garlic and cook for another 30 seconds until fragrant.

Make the Roux:
Add the butter to the pot. Once melted, stir in the flour to create a roux. Cook for 1–2 minutes, stirring constantly until lightly golden.

Add Potatoes and Broth:
Gradually whisk in the chicken broth, ensuring no lumps remain. Add the diced potatoes, paprika (if using), and season with salt and pepper. Bring to a boil, then reduce heat and simmer for 15–20 minutes until the potatoes are tender.

Blend for Creaminess:
Using an immersion blender, blend part of the soup for a creamy texture while leaving some potato chunks for heartiness. (Alternatively, transfer half of the soup to a blender, puree, and return it to the pot.)

Add Dairy:
Stir in the milk, heavy cream, sour cream, and shredded cheddar cheese. Simmer for another 5 minutes, stirring until the cheese melts and the soup is creamy and smooth.

Serve:
Ladle the soup into bowls and top with crispy bacon, extra cheese, sour cream, and chives as desired.