The owner of the Debert Diefenbunker is betting that blockchain technology and cryptocurrencies will pay off for his new companies and make online gambling safer.

Jonathan Baha’i, who operates several businesses in a Cold War-era nuclear fallout shelter built by the federal government in the 1960s, launched the Peerplays Blockchain Standards Association just over a year ago, which could have set up anywhere, but Baha’i happened to pick up the 64,000-square-foot fallout shelter in a tax sale in 2013.

The company is a registered non-profit, but it does offer “profit sharing” and has already distributed some of the proceeds to those who own tokens in the blockchain, Baha’i said.

He also founded eXeBlock Technology, a publicly traded company that designs custom blockchain-based applications known as decentralized apps or DApps.

The first gambling app to launch on the Peerplays blockchain was a rock-paper-scissors game called HelmBet. Another app called Bookie, which will take bets on all major sports, is slated for beta testing next month.

eXeBlock is building a total of four apps for the Peerplays blockchain and is also working on other apps for other industries such as insurance and health care, said Baha’i.

After Bookie, the next app will operate 50-50 draws that can help non-profits run larger games and earn more money, he said.

Betting on the Peerplays blockchain is based on Bitcoin, but other cryptocurrencies, such as Ethereum, may be used depending on the wishes of users and blockchain operators. The games won’t take cash, credit or debit card transactions because those are regulated by governments, banks and private institutions, said Baha’i.

Using cryptocurrencies means no one — except users — controls the blockchain economy. No outside force can shut it down or change the rules.

“We can’t cryptographically secure dollars,” Baha’i said. “That’s one thing.”

“Using tender is attached to all the rules of a bank. The money that you use is completely at the behest of the banks allowing you to. If there’s anything you do that they find questionable or they may not like, they’ll shut you down. You won’t be able to use your debit card anymore. You won’t be able to use your credit card anymore.”

Cryptocurrencies are international, avoiding the difficulties of people in some countries not accepting the currency of another country, he said.

Peerplays was founded with a $4-million private placement and an additional $2.5 million in crowdfunding, all in the Bitcoin cryptocurrency, said Baha’i.

Since then, Bitcoin has gone up more than five times in value, giving the company a capitalization of more than $30 million, he said.

Operators and stakeholders can buy or earn tokens that give them voting privileges on how the system works and allow them to share in profits generated by raking a commission off transactions on the blockchain. Those who hold more tokens have more voting weight and receive a larger share of profits.

The company’s only other source of revenue will be certifying app developers who meet the standards set for the blockchain.

Baha’i said the blockchain is in early stages and betting has been limited to one app so far. The proceeds distributed to token-holders has amounted to about $300. With about 3.8 million tokens issued, the payout to individuals has been very small, but Baha’i said profits will start growing as more apps are released and the blockchain grows.

Blockchain technology is described as a distributed ledger — a transparent method for storing data or conducting financial transactions that is touted as nearly impossible to hack.

Baha’i said Peerplays uses Bitcoin because it is widely accepted.

Betting starts at one milliBitcoin. At the time this article was written, one Bitcoin was worth roughly $13,700, making each bet about $14 on the Peerplays blockchain.

But that value is based on a snapshot in time. The cryptocurrency started at just over $1,000 early in 2017 and shot up to more than $19,000 by the end of the year. It has since fallen back to just under $14,000 at the time of writing.

Many analysts say it is a speculative commodity that is likely to remain volatile.

Bank of Canada governor Stephen Poloz said in December that purchasing the cryptocurrency is “closer to gambling than investing.”

Sylvain Charlebois, dean of Dalhousie University’s faculty of management, agreed, but said no one really knows whether Bitcoin or other cryptocurrencies will have any lasting value.

Right now, they are being traded as a commodity and the value is strictly based on supply and demand, he said.

“The jury is still out on cryptocurrencies,” Charlebois said.

“But when it comes to blockchain technologies, the one thing that we need to underscore here is the fact that in order for blockchain to work, everyone has to buy into it.”

The technology is safe and transparent, said Charlebois, likening it to a hockey rink where the participants are also spectators in the stands and can see all transactions taking place on the ice.

It would be difficult, if not impossible, for someone to monkey with the money, or the data, without everyone seeing it, he said.

Blockchain is already proving its value in the agrifood industry, said Charlebois, where it is primarily being used for supply-chain management as opposed to moving money around.

For example, because Walmart can exert so much control on its suppliers, that company is using blockchain effectively, he said.

“A couple of months ago Walmart conducted a recall of mangoes as a pilot,” Charlebois said. “It took them six days and 18 hours to trace mangoes back to the original farm. With blockchain, it took them 2.2 seconds.”

Baha’i said internet gambling can be risky, but blockchain technology will allow Peerplays to create a safe, transparent platform for gaming.

“The decentralization makes it so that when people actually receive these results, they know they can trust it because it’s come across by multiple parties,” he said.

“There’s no one individual that has all the power to control what’s going to be reported on and what not.”

A provincial spokesperson said the Atlantic Lottery Corp. is the only authorized provider of internet gambling in the region.

“Most Atlantic Canadians are not aware that offshore gambling sites operate illegally in our region,” Brian Taylor said in an email. “Offshore gambling does not provide profits to government to help fund health care, education and other programs and services.”

Baha’i said he isn’t worried about running afoul of the law, because Peerplays simply hosts the blockchain. Others operate it.

It would be impossible to design a system or an app that complies with different laws in different jurisdictions around the world, he said, but the blockchain and apps will all state that users must comply with local laws, placing the onus on them.

And the apps will make it possible for operators to provide local licensing information, making it easy for regulators to see which ones are operating legally.