Yes, chop it. The top should root and grow (it may take a long time, be patient!). First, get soil that is free-draining and fast drying. If you're new at this, just get some cactus soil mix and add perlite to it (general consensus is 50/50). If the hobby grows, you may find yourself playing around with mixes that work better with cacti.

I'd cut it slightly above where the round part starts, and let that sit for a day or two to let the wound callus over. Then just set it on top of the soil and wait. Do not water it. It may get a little shriveled, look a little worse for wear, but do not water it until roots appear. Once the roots are there, give small sips of water that will dry out in a day or so. When you see new growth, you can start a regular watering schedule ... thoroughly soaking the soil and letting it dry completely before watering again.

Good luck!