Creating Your Private Ethereum Chain

https://www.ethereum.org/cli#connecting-to-a-private-test-net

https://github.com/chafey/ethereum-private-network

Creating the Genesis Block

You don't actually need to do this, if you use https://github.com/chafey/ethereum-private-network.

https://blog.ethereum.org/2015/07/27/final-steps/

curl -O https://raw.githubusercontent.com/ethereum/genesis_block_generator/master/mk_genesis_block.py

Create a virtualenv and install the bitcoin package

mkvirtualenv --python=python2 ether_genesis -a $PWD
pip install bitcoin==1.1.35

Execute the script with the given hash (https://twitter.com/DeathRowDemo/status/627572730699722752)

python mk_genesis_block.py  --extra-data  0x11bbe8db4e347b4e8c937c1c8370e4b5ed33adb3db69cbdb7a38e1e50b1b82fa  > genesis_block.json

If you get the following error:

API not returning data. Retrying
API not returning data. Retrying
API not returning data. Retrying
API not returning data. Retrying
Traceback (most recent call last):
  File "mk_genesis_block.py", line 293, in <module>
    print json.dumps(evaluate(), indent=4)
  File "mk_genesis_block.py", line 285, in evaluate
    p = list_purchases(th)
  File "mk_genesis_block.py", line 224, in list_purchases
    t = get_block_timestamp([x['height'] - 1 for x in subpq])
  File "mk_genesis_block.py", line 153, in new_method
    c[str(arg)] = method(arg)

you probably hit a rate limit of a bitcoin server. Just wait a few minutes and try again.