In a large pot, heat the medium flame and cook the bacon until it becomes crispy, about 5–7 minutes. Once done, remove the bacon, letting it drain on paper towels, while leaving about 1 tablespoon of bacon grease in the pot for flavor.

Add the butter to the pot with the reserved bacon grease over medium heat. Once it's melted and bubbly, add the chopped onion and minced garlic, sautéing for 3–4 minutes until the onion is translucent and the garlic is fragrant.

Sprinkle the flour into the pot, stirring it in to create a light paste. Continue cooking for 1–2 minutes.

Gradually whisk in the chicken broth, stirring continuously to eliminate any lumps. Bring to a gentle simmer.

Stir in the diced potatoes, increase heat to boil, then reduce to low and cover; let it simmer for about 15 minutes.

Using an immersion blender, blend the soup until it reaches your desired consistency—smooth or slightly chunky.

Lower the heat and stir in the milk, heavy cream, sour cream, and 1½ cups of shredded cheddar cheese. Season with salt and pepper.

Crumble reserved bacon and stir most of it into the soup. Let it simmer on low for a few more minutes.

Ladle the soup into bowls, garnishing with remaining bacon, cheddar cheese, and fresh chives.