It is predicted that in 2040, the concept of digital citizenship is thriving and many people have done away with their passports and residency cards for the physical world. However, the meaning of digital citizenship has evolved to reflect the personal and ethical challenges posed by revolutionary constructs like virtual nations.

Today, digital citizenship in virtual nations or cyber communities has steadily gained power, influence, and capital comparable to nation-states. These “lands” without land or borders are creating a techno-political and techno-social divide between conventional citizenship and what are referred to as digital dual citizens and digital capitalists.

Society's embrace of virtual nations or groups has followed an often serpentine path. Initially hosted in social media communities, increasing censorship and a desire for greater autonomy led to the creation of proprietary “national” platforms whose members govern themselves and voluntarily pay taxes with digital currencies.

There are at least 11 virtual nations now with a combined population of 200 million “citizens” and a GDP above $100 billion each. Their citizens enjoy higher incomes and live in “gated communities” that have their own security. Benefits like virtual welfare, employment, and other amenities are vastly superior to those provided by physical nations, creating a substantial lifestyle gap between citizens of physical nations and those in virtual nations, who are dual citizens of the physical country they reside in.

Defying many predictions of where we would be, few physical countries recognize virtual nations and either severely scrutinize or ban affiliation with them.

Why did this happen?

Things were not always this way, of course. As more people enthusiastically participate in the digital dual citizenship afforded by virtual worlds, the question begs, is digital citizenship a form of anarchy where people live removed from the physical world, or is it merely redefining what it means to “belong” to a nation?

Some of the key trends that got us to this point include:

  • A convergence of technological innovations in the 2010s and 2020s, including virtual reality, the metaverse, and cryptocurrencies, empowered virtual nations.
  • The post-pandemic transition to remote work was hugely successful, prompting an exodus from physical workspaces to exclusively virtual ones.
  • COVID-19 lockdowns and shutdowns proved the viability of economies going digital.

By the early 2020s, many people had gone through numerous political, cultural and social conflicts within their world and had felt like they were constantly fighting to survive. They decided that they had had enough. Detaching from their physical nations, they created distinct communities in the developing metaverse where their personal political beliefs were shared and implemented.


As society's needs evolved over the last several decades, cracks began to appear in traditional nation-state policies toward shared human needs like food, shelter, and protection. It's not difficult to see why so many people would be drawn to virtual nations that create great wealth and generate billions of dollars to provide welfare to their citizens in the form of employment, education, and benefits.

In response, physical states have dug in their heels, claiming that only they have the “monopoly on violence” that grants them the legitimate use of force or authority over virtual worlds. This belief has often led to established governments waging cyberwar on virtual nations who, in turn, retaliate by crippling physical nations through cyberterrorism.

Whether the technological and ideological chasms between virtual and physical citizens can be bridged remains to be seen. Deep mistrust between the two groups still exists, a sad echo of the situation that existed in the late 2010s, when countries decided to create digital border walls and social media echo chambers to isolate internet users. And humans being human, it should come as no surprise that these techno-social tensions have at times flared into violence.

Is there any hope that digital citizenship can be a force for good? Yes. Despite arguments that “living online” leads to isolation and rejection of a physical state, virtual nations have in recent years brought people together in a way centralized nation-states seem unable to. Many are proving to be the driving force behind innovative technologies and efficient business models, supporting globally diverse talents who want to contribute to a society and world they can believe in.

If nation-states are willing to collaborate with virtual states on the idea of self-selecting communities that use technology to grant participating citizens better, more evenly distributed and decentralized services, they may realize they can broaden their public services and scale them in ways that were impossible before digital citizenship became a reality.

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Vikram Ramankutty

Vikram Ramankuttyi

KPMG in Dublin

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