Heat the skillet over medium heat and add the chopped bacon. Cook until crispy, about 5 minutes, then remove and set aside.
Add the diced potatoes to the bacon fat and spread them out evenly. Let cook undisturbed for a few minutes until the bottoms are golden and crispy.
Stir in the sliced onions and cook with the potatoes, stirring occasionally, until the onions are caramelized and the potatoes are tender and golden, about 8-10 minutes.
Create small wells in the potato mixture and crack the eggs into each well. Season with salt and pepper.
Cover the skillet and cook until the eggs are just set, about 3-4 minutes. The whites should be firm, and the yolks still runny.
Uncover, sprinkle the shredded cheese on top, and cook for an additional minute until melted and bubbly.
Remove from heat, garnish with the cooked bacon, and serve hot straight from the skillet for a rustic presentation.
