Shred potatoes using the fine-hole side of a hand grater or food processor.  Place in a bowl of cold water and set aside.  Meanwhile shred onion using same fine hole grater, or pulse in food processor until very finely chopped.

Drain potato shreds and rinse and dry the bowl that was used and set aside.  Place potato shreds and grated onion in the center of a tea towel or several layers of cheese cloth.   Twist loose material to secure the bundle, and squeeze firmly to remove excess liquid from the shreds.

Pour peanut oil into skillet to a depth of 1/8 inch. Heat slowly over medium to about 365 degrees F. While oil is heating, use the fork to stir the beaten egg, salt, and pepper into the potato shreds. Take care to make sure the egg and seasonings are fully mixed throughout the potato shreds.  Scoop up a rounded tablespoon of potato batter and squeeze it firmly in your palm over an empty dish to remove excess liquid.   Shape batter into a rough disk.  Place it gently into the hot oil. Use a metal spatula to gently press down on the latke to flatten it.

The oil should sizzle but not pop when the batter hits it.  If the oil jumps wildly or smokes; it’s too hot.  If it only bubbles weakly, the oil is not hot enough.  Continue shaping the latkes, using only a rounded tablespoon for each one.  Fry in batches of 5 or 6 at a time for 2-3 minutes per side until brown and crispy.  Remove latkes from pan using metal spatula and place on a wire cooling rack to drain.

Latkes are best when served immediately.  If you need to make them ahead, fry them 4 hours or less before serving.  After letting them drain on the cooling rack, place them on an ungreased, unlined cookie sheet.  Leave at room temp till ready to reheat.  Place in a 375 degree oven for about 10 minutes, until heated through, just prior to serving.