1Prepare the potatoes and onion. Peel the potatoes and place them in a bowl of cold water to prevent browning. Grate the potatoes using the large holes of a box grater or the shredding disc of a food processor. For crispier latkes with more texture, use a hand grater; for more uniform latkes, use a food processor. Grate the onion the same way. The onion adds flavor and helps prevent the potatoes from oxidizing and turning gray. Place the grated potatoes and onion in a clean kitchen towel or cheesecloth.
2Remove excess moisture - this is the most important step for crispy latkes. Gather the towel into a bundle and squeeze firmly over the sink, wringing out as much liquid as possible. You will be amazed at how much water comes out. Continue squeezing until no more liquid drips out. Alternatively, place the grated mixture in a fine-mesh strainer and press down firmly with a spatula. The drier the potato mixture, the crispier your latkes will be. Wet potatoes create soggy, greasy latkes.
3Let the squeezed liquid sit in a bowl for a few minutes. The potato starch will settle to the bottom as a white layer. Carefully pour off the water, leaving the starch behind - this starch will help bind your latkes and make them crispier. Add the grated potato-onion mixture to the bowl with the starch. Add the beaten eggs, matzo meal (or flour), salt, pepper, and baking powder if using. Mix well until everything is evenly combined. The mixture should hold together when pressed.
4Heat the oil. Pour about 1/4 inch of vegetable oil into a large, heavy skillet (cast iron is ideal) over medium-high heat. The oil is ready when a small piece of potato mixture sizzles immediately when dropped in - about 350-375 degrees F. Do not let the oil smoke. Having enough oil is crucial: too little and the latkes will stick and cook unevenly; too much and they become greasy. The latkes should fry, not deep-fry.
5Fry the latkes in batches. For each latke, drop about 3 tablespoons of the potato mixture into the hot oil. Flatten immediately with the back of a spatula into a thin pancake about 3 inches across - thinner latkes are crispier. Do not overcrowd the pan; leave at least 1 inch between latkes. Fry for 3-4 minutes per side until deep golden brown and crispy. Adjust heat as needed to maintain steady sizzling without burning. The edges should be lacy and dark golden, the center cooked through.
6Drain and serve immediately. Transfer the fried latkes to a wire rack set over a baking sheet - this keeps them crispy better than paper towels, which can trap steam and make them soggy. Season with a sprinkle of salt while still hot. Keep finished latkes warm in a 200 degree F oven while frying the remaining batches. Serve hot with sour cream and applesauce on the side - offering both is traditional, allowing each person to choose their preference (or enjoy both). Garnish with fresh chives if desired. Latkes are best eaten immediately; they lose their crispness as they sit. For Hanukkah tradition, light the menorah candles first, then enjoy the latkes while they are still crackling.