• While the words nation and state are often used synonymously, the words have quite distinct meanings. There is a Tibetan nation for instance, but there is not a Tibetan state.
• A nation is a people, and a people is a group a persons sharing common customs, origins, history, and frequently language; a group of persons sharing a nationality. A state, on the other hand, usually refers to a politically organised body of people occupying a definite territory, especially one that is sovereign; a group of people sharing a country, that is usually composed of more than one nation. So we can have a nation or people not attached to a single or specific territory or state; e.g. the Kurds, whose people are concentrated on the territories of 4 modern states. And states can be, and usually are, composed of many nations/peoples.
• The terms cybernation and cyberstate are often used without acknowledgment or understanding of the differences between the terms nation and state. Without this distinction, the only nations that exist become those that are recognised states, and there are many more nations than there are UN members.
• Some nations often referred to as cybernations or cyberstates, are actually quasi-states; e.g., Hutt River Province Principality is more known as a cybernation or a cyberstate, but according to certain legal interpretations it is a non-sovereign state, complete with its own territory, that seceded from Australia long before the Internet came into existence. Sealand too is a quasi-state more than a cyberstate, although it has a bit more Internet infrastructure than Hutt River Province.
• The claim that all cybernations/cyberstates are cyber-scams is a GROSS GENERALISATION, and you should be aware of this while reading the page we link to below. Hutt River Province Principality and Sealand are not known to have perpetuated any specific scam, and most micronations (cybernations) are bona fide games/simulations whose activities have nothing to do with fraudulent business schemes or swindles. There are also some nations, variously referred to as micronations, cybernations, microstates, or cyberstates depending on the author's viewpoint, that are even quite serious new country projects, and the majority of these also have nothing to do with fraudulent business schemes or swindles. And there is also a separate class of nations, often referred to as Fifth World nations, that have entirely rejected the Old World Order based on Roman Law (jus soli/jus sanguinis), important international conventions and treaties, and have accepted a New World Order based on an entirely new law, Cesidian Law (jus cerebri electronici), and these too are nothing but serious nations, however theoretical as states they may seem, and these too have nothing to do with fraudulent business schemes or swindles.
• Finally, while there are many fake states out there, automatically equating cybernations with fake nations can only lead to discrimination. Tibetans don't consider themselves anything less than a nation and a people, even though their state and country has been greatly undermined by another despotic state. The article's suggestion below, therefore, that you should not deal with any nation if your home country doesn't recognise their banks, trusts, or corporations, can only lead to deliberate isolationism, if not arrogant racism. And when this philosophy is applied to nations without a specific homeland, i.e. cybernations proper, this can lead to the impression that your country's culture or language is superior to that of a cybernation, which often is the case, but not always so.

Having read this introduction, you can now read the Quatloos! article below on Fake Nations with profit, and with a much more enlightened perspective (it should have been entitled Fraudulent Nations and Fake States), on micronations that may be little more than an attempt to defraud or swindle the general Internet-navigating public:

http://www.quatloos.com/fake-nations.htm