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How to set up manually the GCC toolchain and SDK
An opensource toolchain is available in https://github.com/pfalcon/esp-open-sdk. It is ready to run on Linux host only.
Use Git command to clone the repository esp-open-sdk in your local directory:
git clone https://github.com/pfalcon/esp-open-sdk
Run the makefile to install.
This will take a long time, especially on a slow internet connection, so take a coffee 
.
make STANDALONE=y
All you have to do to get the tools in your PATH is include the
esp-open-sdk/xtensa-lx106-elf/bin/
directory in your .bashrc.
Using the Arduino IDE.
Another Integrated Development Environment (IDE) for programming in C++ and more easier for beginners is the Arduino IDE http://www.arduino.cc/en/Main/Software. Arduino IDE is an editor that is able to compile the code for us using Xtensa GCC toolchain, which is available at github as ESP8266/Arduino http:https://github.com/esp8266/Arduino. It also uses the ESPTool to automatically upload the hex to the SOC (system on chip). This repository provides several examples that you can put on the chip, and describes the install instructions for running it. They are as simple as adding the board manager url http://arduino.esp8266.com/package_esp8266com_index.json in the preference settings menu and install it using Tools→Board→Board Manager.
Notes
An arduino board is not needed as the ESP8266 has 16 times the memory and 5 times the speed.
32KB for the UNO Flash and it operates at 16 Mhz.
512 KB for the ESP8266 and it operates at 80 Mhz. (Up to 4Mb and 160Mhz on some)
Its limitation is its IO pins . Most have but one Analog pin but many Digital pins