Peel and dice potatoes into uniform 1/2-inch cubes. Cook bacon until crispy, crumble and set aside.

In a large Dutch oven, melt butter over medium heat. Add diced onions and sauté for 4-5 minutes until translucent. Add minced garlic and cook 30 seconds.

Sprinkle flour over onion mixture, stirring constantly for 2 minutes to form a light blonde roux.

Gradually whisk in chicken broth, then add milk, potatoes, thyme, and smoked paprika. Bring to a gentle boil, reduce to simmer, and cook 15-20 minutes until potatoes are tender.

Partially mash the potatoes in the pot, leaving some chunks for texture. Optionally, blend 1/3 of the soup and return it to the pot.

Reduce heat to low. Stir in heavy cream, shredded cheddar cheese, and sour cream. Mix until cheese is melted and soup is creamy. Season with salt and pepper to taste.