Cook the Bacon:
In a large pot or Dutch oven, cook the bacon over medium heat until crispy. Remove the bacon and place it on a paper towel-lined plate. Reserve about 2 tablespoons of bacon grease in the pot.

Sauté the Onion and Garlic:
Add the chopped onion to the pot and sauté in the bacon grease until softened and translucent (about 5 minutes). Stir in the garlic and cook for an additional minute until fragrant.

Make the Roux:
Add the butter to the pot, letting it melt. Sprinkle the flour over the onions and garlic, stirring constantly for 1-2 minutes to cook off the raw flour taste.

Build the Base:
Slowly whisk in the chicken broth, ensuring there are no lumps. Add the diced potatoes, salt, pepper, and smoked paprika (if using). 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 fork-tender.

Blend the Soup (Optional):
For a creamier soup, use an immersion blender to partially blend the soup. Alternatively, transfer half the soup to a blender, blend until smooth, and return it to the pot. Skip this step for a chunkier texture.

Add the Dairy and Cheese:
Stir in the milk, heavy cream, and shredded cheddar cheese. Cook over low heat, stirring occasionally, until the cheese is melted and the soup is creamy. Adjust seasoning with more salt and pepper, if needed.

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