Before you can start building on Algorand, you need to set up your development environment properly. This includes installing a few essential tools that will allow you to run local networks, manage your codebase, and execute scripts. These tools are required for installing and using AlgoKit, the core toolkit for Algorand development. Make sure to complete the following steps before moving on.

• Docker: Required to run a local test network. Install Docker Desktop. (For Localnet)
• Git: For version control.
• Python: Version 3.12 or newer.

Installation

The recommended way to install AlgoKit is with pipx to avoid conflicts with other Python packages.

#Install pipx 
python3 -m pip install --user pipx
python3 -m pipx ensurepath

#Close and reopen your terminal, then install AlgoKit
pipx install algokit

For other installation methods (e.g., using Homebrew on macOS), please refer to the official AlgoKit installation guide. 

Algorand Network Types

Localnet

Localnet is a private, local Algorand blockchain instance used for development and testing on your own machine. It is not publicly visible and does not require real Algo, making it ideal for safe experimentation.

One of the strengths of Algorand is how easy it is to spin up a local network using just a single command:

algokit localnet start

If you don’t plan to use LocalNet, you don’t actually need Docker for anything.

Testnet

Testnet is a public Algorand network that replicates the Mainnet environment for testing purposes. It uses test Algo, so you can test your applications without risking real funds.

Mainnet

Mainnet is the live, public Algorand blockchain where actual transactions and assets are managed. Interactions here involve real Algo and real value.