“Tencent will not invest in bitcoin because it has no intrinsic value.” James Mitchell, chief strategy officer and senior vice president of China’s Internet giant Tencent, said in a closed-door investment meeting on Thursday .

Mitchell joined Tencent in 2011 after leading Goldman’s research team in Manhattan , and for the time being is responsible for the company’s strategic planning and implementation, investment acquisitions and management of investors relations.

He pointed out in the meeting that bitcoin has no intrinsic value and nor does diamond, while its scarcity is intended to boost the value. So far, 80% of all 21 million bitcoins has been mined. Tencent has a big appetite for scarce resources, but will not invest in bitcoin.

“ If I am an audience, the topic that will ignite my interest is the future value of bitcoin.”

In his opinion, the value of bitcoin varies with its mining cost superficially, but in fact the opposite is true.

Specifically, bitcoins are created through mining and the mining difficulty is adjusted regularly to keep bitcoin production at a stable rate. The mining cost is positively correlated with the mining difficulty. If bitcoin price continues to surge, more people will be lured to become bitcoin miners, which increases the computing power of bitcoin mining pools as a result. Then, we will see a rise in mining difficulty and in the production cost of bitcoin.

“We are unable to predict the value of bitcoin based on the mining cost, because it is a loop calculation.”

Mitchell also raised the so-called “bitcoin paradox” . He believed that bitcoin’s market dominance is hard to predict, so we could not measure its value properly.And bitcoin’s supply can be controlled through algorithms, but it is a different story for other cryptocurrencies.

But he did not completely deny the future value of bitcoin. The chief strategist said that when energy consumption required to mine bitcoins becomes the most important factor, the energy could act as a universal equivalent, like government-backed currency. Although the “electronic money ”is still nascent, it can also represent the future of energy-backed currency.

Tencent CEO Ma Huateng (also known as Pony Ma) is now the richest person in China, according to the Global Rich List published on Wednesday by Shang-hai based research firm Hurun Report. Ma also gives cryptocurrency the cold shoulder, by saying in late January that,

“Currently ,numerous public blockchains (bitcoin, for example) have consumed a massive amount of energy to ‘mine’ virtual currencies. Does this mean they are endorsed by any equivalents? According to the life theory, many living systems will evolve and then be eliminated over the time.”

Although Tencent distances itself from cryptocurrency, the company has actively embrace the underlying technology of bitcoin, known as blockchain. The China tech giant has launched a BaaS(blockchain as a service) open platform in late 2017 and has applied the technology in many fields such as supply chain finance, logistics information,legal services, among others.