Preheat oven to 325 F. In a saucepan, melt chocolate with water over low heat. Mixture will begin to harden.
In a large bowl, cream butter and sugar until light and fluffy. Add 1 egg at a time, beating well after each addition. Beat in the vanilla and chocolate mixture. Combine the flour, salt and soda; add to creamed mixture alternately with buttermilk. Fold in nuts if desired.
Pour into a greased and floured 10-in. tube pan or fluted tube pan. Bake for 1-1/2 hours or until a toothpick inserted in the centre comes out clean. Let stand for 10 minutes before removing from pan to a wire rack to cool. Sprinkle with confectioners' sugar if desired.