Could Virtual States Reduce the Bloodshed Over Land?

Strategypage discusses the Rohingya in Myanmar (Burma) and the general issue of "stateless" people. In this digital age, is there an alternative to requiring land to be a state?

I've mentioned this e-state notion both for Israel as a Plan B in the nuclear age and for Palestinians who would have a hybrid-land/digital state to encompass "refugees" (actually the descendants of refugees) in Arab states.

Could this be an option for the Kurds and others who lack a state in the modern state-centric system?

Could "states" that have nothing but embassies in traditional territory-based countries as their sovereign territory provide a true national experience and benefit as an alternative to long fights to wrest control of land from somebody else as the basis for declaring a state?

I think it would be worthwhile to explore what functions a state provides that aren't actually based on owning territory or not owning all the territory your people live in.

And then look at how being governed in a virtual state online could carry out those functions. If states really don't want these stateless people as a burden, surely a good portion of the taxes they pay could go to the virtual state government to fund the new entities.

A police force operating in the physical world capable of moving across borders would be needed; and elements of government would need places to carry out at least some of their functions. Does statehood require you to own the building where the functions occur? Or could this be done all online?

Would Myanmar wage war on the Rohingya if those people accepted virtual Rohingyan citizenship even if they live, work, and own personal property inside Myanmar?

It would be extremely interesting to see if Arabs living in Israel would choose to become citizens of a Pal-E-stine or remain i-Sraeli citizens. 

Ultimately, the virtual states could still negotiate for actual territory. And maybe that would be done peacefully in time on a basis that satisfies both parties.

Or maybe people would find they are happy to live in a virtual state that preserves their ability to live in the physical world without being attacked and discriminated against.