What a "nation" is it is a social consensus mechanism, to uphold a state, that is resistant to being overthrown. That is achieved with representative government, people-rule, voting for which state to follow. The Nakamoto consensus, invented by Craig Wright in 2009, is the exact same thing, a social consensus mechanism to uphold a state that is resistant to being overthrown. The first generation, proof-of-work, did so by "voting with CPU", a simple way to bootstrap a "virtual nation" because it only required a cryptographic hash function, widely accessible in 2009. The third generation, after proof-of-stake, is what I call "proof-of-vote". It is exactly analogous to what a "nation" was as a social consensus mechanism. People vote for validators, using proof-of-person and proof-of-suffrage, and validators are delegated authority based on how many votes they have, game theoretically equivalent to how many coins a validator has in proof-of-stake.
The Nakamoto consensus is since 2009 a singular global consensus, a single "nation", from that it can be deduced that the story of "competing virtual nations" is completely false. There will be a singular nation, with competing legal systems within the state, and because of that a free market for government, what Paul Emile de Puydt called "panarchy" in 1860.