Place the bacon in a large skillet and cook over medium-high heat, turning occasionally, until evenly browned, about 10 minutes. Drain the bacon slices on paper towels.

Place potatoes into a large pot of lightly salted water; bring to a boil, reduce heat to medium-low, and simmer until tender, about 20 minutes. Drain potatoes and return them to the pot.

Mash butter into the potatoes with a potato masher or electric hand mixer until melted completely into the potatoes; add sour cream and continue to beat until combined. Crumble bacon into the potato mixture; add Cheddar cheese and chives and stir. Season potatoes with salt and pepper.