How to create nameservers for your domain in Godaddy

This is a tutorial on how to create nameservers for your domain in case you have a VPS or private server and you want to use your own name servers. This is not related to setting nameservers for your domain which is simpler and is for when you change your hosting. Creating nameservers is often done if you will host multiple websites on one server and you want custom nameservers to point multiple domains to that server.