Chop the bacon up into ½” to 1” pieces. You can slice the whole pound at once, no need to separate the slices as they will come apart as they cook.
In a pan over medium heat, cook the bacon until it just starts to get crispy (about 10 minutes). You want each piece to be fully crisp for the best texture, but do not burn the bacon as it can create a bitter flavor.
When your bacon is crispy, remove it from the pan and place it on a paper towel to soak up any excess grease while it cools.
Remove all but two tablespoons of the bacon grease from the bottom of a pan, reduce the heat to low, then add the diced onion and jalapeño (if using).
Saute for 20 minutes, or until the onions are fully translucent and starting to caramelize.
Add the garlic and saute for two to three more minutes until fragrant.
Add the bacon back to the pan with the onions and mix until it is all well incorporated.
Add the brown sugar and balsamic vinegar and mix until well-combined.
Increase the heat to medium-low and simmer, uncovered, for 45 minutes to one hour, stirring occasionally. You want the mixture to reduce and form a thick syrupy consistency.
Serve immediately or store in an airtight container in the fridge for up to two weeks. After storage in the fridge, you can reheat the jam in a pan to get it back to the correct consistency.
Notes
Bacon - I prefer to use thick-cut bacon because I like the consistency, but regular bacon will work fine too.