Place the bacon bits in a cold saucepan, then heat over medium-high.
Fry until the fat comes out of the bacon and the bits become crispy.
Transfer them onto a plate lined with kitchen paper to absorb any excess oil, then set aside.
Place the pan back into the heat and add the chopped onion.
Sauté until it softens, then add the tomato paste and Hungarian paprika.
Continue sautéing for 2 to 3 minutes—lower the heat to avoid burning the paprika and puree.
Add the chopped green bell pepper, mix, and cook for another minute.
Add the potatoes, salt, and ground black pepper.
Mix everything to coat the potatoes with the spices.
Pour 1½ to 2 cups of water --- just enough to cover the potatoes.
Cover with a lid, turn the heat to medium, and bring to a soft boil.
Lower the heat and continue simmering until the potatoes are tender. Add the chopped sausage and mix.
Taste your Hungarian paprika potatoes and adjust seasoning, as desired.
Cover and cook for about 5 minutes, then remove the pan from the heat.
Transfer to plates and crumble the bacon bits on top --- serve!