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Risk, inclusion and energy use: The hard realities of incorporating crypto in Austin


Walking around Austin, crypto’s influence is hard to avoid. Billboards promoting Bitcoin are plastered around the city, flyers downtown have QR codes that lead to advertisements for courses on decentralized finance and social groups are finding ways to draw in more people.

But not everyone has warmed up to the idea of crypto becoming more widespread. At SXSW, local and national media questioned the attention that crypto grabbed throughout the festivities with installations like Doodle. Beyond the festival, questions have been raised about some of the possible side effects of individuals and the city of Austin getting in on crypto.

Beneficial or risky?

Vice wrote that a common talking point at SXSW involved the money missed out on if people don’t join in on crypto. But the people who receive the message that crypto is lucrative have some feeling worried.

Tonantzin Carmona, a fellow at the Washington D.C. think tank the Brookings Institution, has noted that there’s a growing number of unbanked or underbanked populations trying their hand at crypto.

“My fear is people are making these claims that cryptocurrencies are going to solve these issues without explaining adequately how cryptocurrencies promote financial inclusion or equity, and how do we know that they aren’t actually hurting the most vulnerable and putting them at risk?” Carmona asked.

She went on to add that offerings like payday loans and subprime mortgages once made similar promises as an innovative step that could help communities who lacked access to mainstream services. In those instances, some users then faced financial woes.

“Are we promoting access to a riskier product?” Carmona said. “How does that solve issues of equity?”

Inclusion and jobs

At last week’s city council meeting, two crypto resolutions passed.

One of them called for the city manager to study how the city could use or hold crypto and the other directs the city manager to see how Austin could foster Web3 and blockchain projects. Some, including Austin Justice Coalition, voiced their thoughts that Austin has bigger priorities.

For many Austinites, some of those priorities may include gentrification and displacement. Other places that have seen an explosion of crypto like Puerto Rico and Miami are also managing soaring costs of living.

But at least having knowledge of crypto may come in handy for Austinites. Abena Primo, a professor in the school of business and technology at Huston-Tillotson University, informally teaches people about decentralized finance through her recently-launched newsletter. On-campus, it's become a natural learning avenue, as many of her students own crypto and ask her questions about it.

"With my work, I'm trying to make it not be a gentrification type of project," Primo said. "I'm hoping that by educating people at Huston-Tillotson University and in the community here, that people of color will not be left behind as they were with the internet revolution."

And it's not as though Defi lessons have taken over since Web3 is "still somewhat hypothetical," Primo says. With HTU placing high value on job attainment for their students, Primo says specialization in something like computer science will make the job hunt easier than only having skills in blockchain technology.

Environmental concerns

Leading up to the vote, some council members voiced worries over crypto's environmental impact and there was confusion over which applications of crypto required greater energy use. Eventually, someone explained the proof of work versus proof of stake methods. Those that rely on proof of work consensus mechanisms, like Bitcoin, involve “significant levels of energy consumption.”

And it's not just consumption. The large quantities of electricity required in crypto mining can have a spillover effect into local economies, like in Upstate New York where residents faced higher electricity bills.

Still, Mayor Steve Adler laid out the debate on its energy consumption.

“I’ve heard both those arguments,” Adler said. “I haven’t heard anybody that I trust actually or feels impartial to actually weigh those two factors, and I hope that’s part of the analysis of Council Member Kelly’s resolution that I think it’s covered there.”

Like others in the city, council seems split on just how crypto should be addressed in Austin. Mayor Pro Tem Alison Alter warmed up to the resolution on fostering Web3 but not the one that'd involve the study of the city holding or using crypto.

“I'm really uncomfortable with the notion of us accepting payments in crypto anytime soon, I'd be happy to take a donation. And I'm pretty sure that if somebody offered a sizable donation in crypto to the city, we'd figure out a way to accept it without this direction,” Alter said before abstaining from the resolution for studying the city's holding or use of crypto.


With deposition and trial looming, Elon Musk has offered $44B for Twitter, again

Elon Musk has proposed once again to buy Twitter for $54.20 a share.

The news that Musk is offering to carry on with the $44 billion buyout was first reported by Bloomberg. Now, a filing with the Securities and Exchange Commission shows Musk made the proposal in a letter to the tech giant on Monday.

The New York Stock Exchange temporarily halted trading in Twitter stock twice Tuesday, first because of a big price move and the second time for a news event, presumably the announcement of Musk's renewed offer.

While the per share offer price on this latest proposal remains the same as the original offer, it’s unclear if Musk has made other term changes or if Twitter would reject it. According to other reports, a deal could be reached this week.

The stock closed at $52.00/share Tuesday, indicating market uncertainty around the $54.20 offer.

After Musk informed Twitter of plans to terminate the original agreement in July, Twitter sued. A trial has been expected in Delaware Chancery Court on Oct. 17.

With the proposition of a buyout on the table again, it revives the question of whether Musk might move Twitter from San Francisco to Central Texas.

He’s done so with some of his other companies. Tesla’s headquarters in southeast Travis County had its grand opening earlier this year and tunneling business The Boring Company moved to Pflugerville. At least two other Musk companies, SpaceX and Neuralink, have a Central Texas presence without being headquartered here.

Technology journalist Nilay Patel this afternoon voiced concerns that owning Twitter and Tesla together could be problematic for Musk, as his Tesla manufacturing facilities in Germany and China are both in countries that have disputes with Twitter over content moderation and censorship.

Telsa shares fell after the Twitter news became public, before rallying to close up, at $249.44.

Austin rents nearly double in a year and are now in the top 5 nationwide

While searching for a place to live, Austin renters will face monthly rates of nearly $3,000, a recent guide from rental marketplace Dwellsy shows.

The median rent in August this year was $2,930, a more than 86% increase since August 2021. That’s $820 more than the nationwide median asking rent in August and puts Austin just below the Bay Area, Boston and New York for large cities with the most expensive asking rent.

“Within this group, Austin, TX stands out for the highest increases in asking rent, which has nearly doubled since this time last year,” the study notes.

Outside of those large cities, however, others are seeing even higher rent spikes. Metro areas that ranked above Austin in one-year increases include those like Kansas City, MO with a 112% change in rent since last August and Tucson, AZ with a 124% change.

The data reflects large apartment communities, single-family homes and 2-6 unit buildings.