01 - Melt the butter in a large soup pot over medium heat. Add the chopped onion and sauté until translucent, about 4 minutes. Add the minced garlic and cook for 1 additional minute until fragrant.
02 - Stir in the diced potatoes, smoked paprika, and cayenne pepper. Season generously with salt and freshly ground black pepper.
03 - Pour in the chicken broth and bring to a boil. Reduce the heat to a simmer, cover the pot, and cook for 20 to 25 minutes until the potatoes are fork-tender.
04 - Remove approximately one-third of the soup from the pot. Mash the potatoes with a potato masher or blend until smooth, then return to the pot. This creates a thicker, creamier texture while maintaining some potato chunks.
05 - Stir in the whole milk and heavy cream. Heat gently over low heat until warmed through. Do not allow the soup to boil after adding the dairy.
06 - Add the shredded sharp cheddar cheese a handful at a time, stirring continuously until each addition is completely melted and smoothly incorporated into the soup.
07 - Remove the pot from the heat. Gently stir in the sour cream until the soup is smooth and well combined.
08 - Ladle the soup into bowls. Top each serving with crumbled bacon, sliced fresh chives, and additional shredded cheddar as desired.