The first step in forming this rope chain is to form a loop by passing the working end under the standing part as in the picture above.
The next step begins a repetitive step until you have linked up into the chain all but the last few inches of your rope. Form a small loop with the standing part of your rope just past the loop. Push or pull this loop under then through the loop formed in step one. The idea is to make this chain link loop after loop and keep the chain/loops relatively tight. You don't want to leave gapping openings like 6-8 inches in the links. 1-2 inches is more proper.
Continue making your loops and pulling them up and through the loop in the previous chain link. This chain sinnet method causes other folks to stop and look both while you are doing it and after you are done. Not that difficult, when done proficiently it looks like you are a master rope handler.
Continue making your chain links loop pulled up and through the previous loop until you are left with a few inches of working end rope left or left with a portion of the rope as in the picture that has a built in loop that makes it impossible to actually chain link that portion. This is the last step - push through your last loop the portion of the working end that is left, in the picture it is the loop that came with the 25 foot mooring rope. This forms a method of locking the rope such that it will not come undone on its own. To undo simply reverse this last step - pushing the rope end back through the last loop. When this is done the entire chain will come free as you pull the rope. Note in the picture below how neat this finished chain has become for storage.