In a cast-iron skillet over medium heat, cook the pancetta to render the fat. Once there is some fat rendered in the skillet, remove the pancetta to a paper towel-lined plate to drain. (It doesn't need to be fully crispy yet, as it will cook more in the oven later.) Add 1 tablespoon of melted butter to the skillet with the pancetta fat and stir to combine.
While the pancetta is cooking, thinly slice the potatoes. I recommend using a mandolin to get them nice and thin, but you can use a chef's knife to cut them by hand as well. As you slice each potato, gather up the slices in a neat row and set them aside.
Arrange the rows of sliced potatoes in the skillet. Stand the slices on their sides and place them around the edge of the skillet. Then add some to the center if you have room.
Stuff the diced shallot between the potato slices. Pour the remaining melted butter over the potatoes. Seasoned with salt and pepper.
Bake for 1 hour. Top the potatoes with reserved pancetta and 1 teaspoon of fresh thyme leaves. Bake for another 30 minutes or until the potatoes are tender on the inside and crispy on the outside.
Remove from the oven and sprinkle with a little more fresh thyme if desired. Cut into sections and serve warm with your favorite meals.
Notes
If you don't have a 6-inch skillet, you can use a 1-quart casserole dish for roasting the potatoes. Cook the pancetta off in a skillet and then stir the melted butter into the grease. Pour this mixture into the bottom of the casserole dish and then proceed as directed.
This recipe can be doubled and made in a 12-inch cast-iron skillet.