Cook bacon in hot skillet until crisp. Remove from pan and set aside to cool.

Remove all but 1 tablespoon bacon fat from pan.

Add onion to bacon fat and cook over medium heat, 1-2 minutes, until they begin to turn translucent.

Add butter to onion and let melt and bubble. Place potatoes and bread pieces in skillet with butter and onions. Toss to coat with butter.

Cook over medium heat for 10 minutes, tossing occasionally.

Turn heat down to low.

Sprinkle cheddar cheese over top of potatoes. Top with crumbled bacon.

Sprinkle with chives.

Serve with salt and pepper to taste.