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I'm trying to setup dependencies to write and test plutus contracts, but I'm worried that the dependencies may not be compatible with the M1 chip.

I have been following these instructions https://www.reddit.com/r/cardano/comments/mmzut6/macos_plutus_playground_build_instructions/

and I am recieving the same error

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I'm running an M1 Pro with Monterey and have everything up and running correctly, so it's definitely possible!

This github guide is very useful: Cardano Plutus apps install.

The new M1's use AMD architecture, which is why it's erroring out stating "aarch64-darwin is missing in artifact.nix".

What's most likely missing is adding these two lines to your nix.conf as instructed in the link above

system = x86_64-darwin
extra-platforms = x86_64-darwin aarch64-darwin

This instructs Nix to default to installing packages built for the x86_64 architecture instead of the M1's native aarch64 (i.e. ARM).

Perhaps in the future this won't be necessary, but for now lots of packages aren't built for ARM.

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