Peel potatoes and place into a large bowl filled with cold water. This will prevent them from turning brown while the others are being peeled.
Next, use the food processor fitted with the shredding blade to shred the potatoes. Alternatively, use a handheld grater to shred the potatoes. Then, shred in the onion. Place shredded potato/onion mixture into a cheesecloth or thin kitchen towel and wring out any excess liquid into the sink.
Place the dry, shredded potatoes and onion into a bowl and add the egg, potato starch, salt, and pepper. Mix until well combined.
Heat oil in a medium-large skillet with high sides, on the stove over medium-high heat. To test if oil is ready, drop in a tiny piece of the potato mixture – if it starts to sizzle, it’s ready.
Lower the heat to medium to prevent oil from splattering. Scoop ¼ cup of the latke mixture and press down into the measuring cup to squeeze out any excess liquid. Then, place into the pan. Only fry 3-4 latkes at a time to prevent overcrowding. Cook latkes for 2-3 minutes on one side, then flip and cook another 2-3 minutes.
Drain latkes onto a paper towel lined plate or baking sheet.
To keep latkes warm and crisp, place onto a pan in a 200°F oven for up to 15 minutes before serving.
Mix dipping sauce ingredients in a medium bowl. Serve alongside latkes.