In a large pot or Dutch oven, cook the diced bacon over medium heat until it’s crispy. Remove the bacon with a slotted spoon and set it aside on a paper towel-lined plate. Leave about two tablespoons of the bacon grease in the pot for added flavor.

Add the butter to the pot along with the onion and garlic. Cook for about 3 minutes until the onion becomes translucent and the garlic is fragrant.

Stir in the diced potatoes and smoked paprika. Pour in the chicken broth and bring it to a boil. Reduce the heat to a simmer, cover, and cook for 15-20 minutes or until the potatoes are tender.

Using a potato masher, gently mash some of the potatoes in the pot to thicken the soup. If you prefer a smoother texture, use an immersion blender to partially blend the soup, leaving a few chunks for texture.

Stir in the heavy cream, sour cream, and cheddar cheese. Cook for another 5 minutes, stirring frequently, until the cheese is melted and the soup is creamy.

Taste the soup and adjust the seasoning with salt and pepper. Ladle the soup into bowls and garnish with the crispy bacon, green onions, and additional shredded cheese if desired.