Setting up toolchain for ESP8266
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"When the ESP8266 was first announced to the world, we were shocked that someone was able to make a cheap, accessible UART to WiFi bridge. Until we get some spectrum opened up and better hardware, this is the part you need to build an Internet of Things thing...."
http://hackaday.com/2014/12/08/compiling-your-own-programs-for-the-esp8266/
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At the bottom of the linked article it says...
Edit: [CNLohr] points out there’s a more preferred toolchain that most people have switched to.
https://github.com/esp8266/esp8266-wiki/wiki/Toolchain