There are a number of causes, but the most common one people cooking at home see is a slightly pink tinge to the inside of the potatoes. These are perfectly fine to eat, although not that attractive.

Basically, enzymes meet oxygen and the potatoes discolor. The chemical reaction occurs with fruit, typically turning brown when cut or exposed to air.

A few tips… use sharp potato peelers (when is the last time you replaced yours?) and sharp knives, as dull blades bruise the potatoes. Use the potatoes quickly after cutting. Submerge cut potatoes immediately in water, chilled is best. Add some acidity to the water. My favorite tricks are concentrated lemon juice and white wine vinegar.

Preparing potatoes for latkes by shredding the potatoes can also be a problem, as grating is often worse than cutting. Potatoes will also react to cutting tools containing iron, or iron skillets.