Digital nomads want to build an internet country for digital citizens
thenextweb.com
thenextweb.com
"Blockchain enthusiasts are also testing an approach that begs the question: are traditional countries still necessary?" It doesn't matter if they're necessary - you can't get rid of them. The system of dividing the world into countries and giving them domain over their citizens is so powerful that just by virtue of being born in the US you're obligated to pay the country taxes for as long as you shall live, unless you renounce your citizenship, but you're not allowed to do that without the country's permission (and not until after paying whatever fees they demand for the privilege).
The idea of a digital country is nonsense... it's just an overwrought term for an online community.
Without countries, inevitably small clans or tribes would form to protect their interests, and those would join with or split with others until well, you can guess where we'd end up. Basically just countries again, likely redistricted.
Now imagine a digital country. What’s the fundamental difference? You’re still interacting with an entity that is far away.
If an organization arose that provided benefits to members in a way similar to actual citizenships, it would likely be competitive and desirable. If this digital country managed to make itself valuable to established states, whether through money, talent, or otherwise, I see no reason why it couldn’t thrive and be comparable to tiny island nations like Vanuatu.
That's the issue with the power of the existing system of countries - you can go claim to form your own online country if you want, but it only exists inasmuch as other countries agree it does. The US isn't going to allow you to set up an embassy because to do so it would have to agree to redefine the concept of what a nation is, and as one of the most powerful nations on earth, that's clearly not in its interest.
Countries don't just spring up and start offering passports. A country isn't a country unless other countries recognize it as such. That's why calling Taiwan a country or a part of China is such a big deal. If doing so would undermine their own sovereignty and monopoly on power, why would they do this?
If something like this happens, it won't be island counties trying to attract digital nomads. It will be big tech companies who want to create little city-states of tech workers without having to worry about laws and immigration restrictions.
Of course in reality the main goal would be to be able to create your shell companies in that virtual country so that you don't have to deal with a potential political change in the cayman islands. I can imagine that goal is very attractive to some, but I don't really see that as a positive for society as a whole.
This might be instructive for what could create a system of digital citizenship. We'd have to enter another period of essential total anarchy and worldwide warfare, where the power relations of the nation-state system break down and basically everybody kills everybody else. Then a "digital country" would need an enforcement mechanism to prevent its "digital citizens" from getting killed by randos they meet on the street.
We might actually be headed there - I think the mass migrations triggered by the climate crisis, coupled with general economic shortages, might tip us over into a global scale war similar to what's happening in Syria or Yemen right now, and new technologies like drones and robots would grant sovereignty to digitally-connected people wherever they go. I could envision a future similar to Neal Stephenson's The Diamond Age, where there's a Common Economic Protocol that basically guarantees a stable currency, enforcement of contracts, economic freedom, and terms of trade. Violation of the CEP is automatically punishable by a drone (nanobot in the book) coming and vaporizing you. Everything we know of as culture - social rights and responsibilities, rituals, beliefs, values, etc. - gets relegated to autonomous "burbclaves" within each city, where citizens with a common interest ("phyles") interact accordingly to rules of their culture. Most phyles have worldwide scope, but within a city would largely keep to the local burbclave.