Place chocolate in top of a double boiler; bring water to a boil. Reduce heat to low; cook until chocolate melts, stirring often. Remove from heat.
Beat butter at medium speed with an electric mixer until creamy. Add chocolate, powdered sugar, and remaining ingredients; beat until spreading consistency.
This frosting is rich and chocolate-y, perfect if you love chocolate! I usually add an extra tablespoon of milk to make it easier to frost with. I've gotten many compliments when I've frosted a chocolate cake with this frosting.