Place the butter in a large saucepan in a medium-heat. When the butter melts lower the heat to low. As it starts to boils, the water will start to evaporate, creating a lot of bubbles and subside as they pop. The butter will look very yellow, the milk solids will aggregate and it will start to sink at the bottom. When the liquid is clear, you are on the first stage, Clarified butter-( turn off the heat and strain to separate the milk solids if you only need a clarified butter)
Keep cooking, stirring not to let the milk solids stick at the bottom of the fat that will be prone for burning. It will create a thick froth. ( skim anything floating but if you want brown butter, leave it) When the liquid butter turns amber with tiny bubbles rising from the bottom of the pan and smells fragrant and nutty, you've got Ghee. (strain immediately using a fine sieve strainer, cheesecloth or like what I use a coffee filter. But please don't discard the milk solids, delicious to spread on your toast.)
Taking more steps ahead, continue cooking while stirring until deep amber with a delicious, deep buttery and nutty scent. NOW YOU HAVE A SEXY INGREDIENT. Transfer to a heatproof jar and chill to cool. Cover tightly and store on the counter or in the fridge.