Step 1: Cook the Bacon

1. In a large pot or Dutch oven, cook the chopped bacon over medium heat until crispy, about 5-7 minutes.
2. Use a slotted spoon to transfer the bacon to a paper towel-lined plate, leaving the rendered bacon fat in the pot.

Step 2: Sauté the Onion and Garlic

1. Add the diced onion to the pot with the bacon fat and sauté for 3-4 minutes, or until softened and translucent.
2. Stir in the minced garlic and cook for an additional 30 seconds, stirring frequently to prevent burning.

Step 3: Cook the Potatoes

1. Add the diced potatoes to the pot and stir to coat them in the onion and garlic mixture.
2. Pour in the chicken broth, ensuring the potatoes are fully submerged.
3. Add smoked paprika, thyme, salt, and black pepper to taste.
4. Bring the mixture to a boil, then reduce the heat to a simmer. Cover and cook for 15-20 minutes, or until the potatoes are tender and easily pierced with a fork.

Step 4: Create the Creamy Base

1. In a small bowl, whisk together the flour and 1/4 cup of the milk until smooth.
2. Stir the flour mixture into the pot, followed by the remaining milk and heavy cream. Simmer for 5-7 minutes, stirring frequently, until the soup thickens slightly.

Step 5: Blend for Creaminess

1. Using an immersion blender, puree the soup partially, leaving some potato chunks for texture. If you prefer a smoother soup, blend it completely. If using a countertop blender, blend the soup in small batches, then return it to the pot.

Step 6: Add the Cheese and Bacon

1. Stir in the shredded cheddar cheese until melted and fully incorporated.
2. Return half of the cooked bacon to the soup, reserving the rest for garnish.

Step 7: Serve and Garnish

1. Ladle the soup into bowls and top with your favorite garnishes, such as sour cream, green onions, additional cheddar cheese, and the reserved bacon.
2. Serve hot with crusty bread or biscuits for dipping.