Nicosia, called Lefkosia in Greek and Lefkoşa in Turkish is the capital city of both Cyprus and the Turkish Republic of Northern Cyprus. The city is cut in half between the two parts of the Island. The old town consist of a round fortified city, also cut in half. Nicosia is probably the only capital in the world still divided by a wall.
There is only one hostel in the city located in Chrisaliniotissis street where you can have a bed for 10€.
No squats exist in Nicosia now, but you can try Squatting abandoned places since there are many abandonned house and many open doors.
Hospitality exchange is also possible.
There is a very nice café called Utopia in Areos street. There you can meet all the alternative people of Nicosia and get a free price coffee. They also do free price lunch on fridays. And they also sell some nice natural and organic products.
There is a food market every wenesday and saturday where you can find cheap vegetables and fruit. It's close to Utopia on a parking next to the wall of the old town. Probably also possible to dumpsterdive there.
There is one supermarket in the south part in old town called green tree. If you want to buy simple food products it's usually cheaper in the Turkish part, especially bread and baklava. There is a good and cheap bakery in the Turkish side in Abdi Çavuş street, with pide for 1 lira and lahmacun for 2.5 lira.
The macdonald on Ledras Street has wifi, password should be "mcdelivery".
The very nice bar Kalakathoumena also has a free wifi, password should be "kalakathoumena".
What to do
Have a walk in the Turkish part, eat a baklava, and see how much it's different from the south part. Have a look at the street ending on the borders and closed by a wall.
You can have a look at Trikoupi street, it's a very funny street with many immigrants. You can get the cheapest beers there at the Nikolas kiosk.
If you want to go out and listen some good alternative music you can check Svoura bar in Thermopylon street.
You can also hang out near Faneroumeni church where you can meet some nice people, and find some nice bars, especially Kalakathoumena one of the oldest bar of the old town.
You can find free toilet on Ledras street. Find the mcdonald go inside the building where there is kind of a small mall, go at the end of it and you can find free toilet on the left.