Last August, I visited Istanbul for the first time and found it to be a fascinating city. The people were friendly. The food was excellent. The energy was off the charts. Every district I stepped into felt a little different, in a good way. Each time my wife and I visit a new city, we often join a free walking tour led by a local. This helps us navigate the city, and the guide usually provides tips on restaurants, best areas to visit, and other useful information.
We had a guide in Istanbul who had lived there his whole life. As he described various places around the city it was clear this place meant a lot to him. When we were standing right outside Topkapi Palace, a palace built in the 15th century by the Ottoman Empire, the guide started to talk about the Turkish Lira. For those unfamiliar, the Lira is the national currency of Turkey. He told us that we better visit the Palace today after the tour, because the price might be higher tomorrow, half jokingly but also half serious. He said that they no longer print off the prices for entrance, not just here but at most restaurants. The reason being that the inflation rate was over 60%, so the prices often needed to adjust by the week or month.
For the first time in my life, I felt what he was saying. It's one thing to hear about high inflation rates around the globe, but personally I find it challenging to put myself in the shoes of those experiencing it. This time it hit differently as I was standing there listening.
From the Palace, we walked down the hill towards the Grand Bazaar which was built 500+ years ago. The bazaar is a massive maze of shops in the middle of old town Istanbul. It's mostly covered by roof and you can basically anything there. As we walked through the maze, the guide took us to the area where hundreds of vendors buy and sell physical gold. The shops weren't sitting empty, there appeared to be high demand. Occasionally, we also noticed signs that said "Buy Bitcoin here".
Last fall, KuCoin put out a report saying that over half of Turkish citizens now own crypto. Based on my experience in Istanbul, this estimate doesn't surprise me. It's not that the 60% inflation rate was causing chaos that was noticeable, people appeared almost used to it from an outsiders point of view. What was noticeable was that an alternative method of storing value was preferred by many. Whether that be gold, crypto, etc. This is something that isn't common in many western countries as of today.
Could a permissionless, global, 24/7/365, self-custodial, stateless financial system be an alternative to the permissioned, local, 5 days per week, centralized, state backed financial systems that exist today? Could they co-exist?
I personally found it helpful to go a place that is adopting the former at higher rates. It seems they don't just view "crypto" as an investment opportunity.
