I have never written an algorithm and unfortunately I have no idea where to start. That's why I'm here looking for help. Where do I best start? And what do I even have to do to write an algorithm?
You have been given an impossible task.
An algorithm is written by breaking down a task into a series of steps each of which is simple enough to translate into computer code.
You learn to write algorithms by analysing simple tasks, and looking at code which more experienced programmers have devised to analyse exactly what those simple steps are, and how they have translated those steps into code that can be communicated to a computer to execute them.
Character recognition based on a given picture file is an immensely complex task. It is not the place to start learning about algorithms. It requires far too much background in analysis of graphic designs and formats.
The best you can hope for as a beginner is to be able to use OCR libraries or programs devised by others to achieve your end.