Miss Tam,
This is an interesting question that comes up from time to time. It often degenerates into 'I could never do that ...' against 'I think its fantastic' but I appear to have stumbled across the conversation in its infancy
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There are people who only do online, and there are people who do online to build a connection that they make physical in the future after a period. As for why people do online only, there are many reasons: some might be nervous of a physical relationship, some, unfortunately might be keeping this from a RL partner, some are just experimenting. There might be others that have restrictions in their domestic situation yet still want to experience this type of connection. I got into the online way of doing things to build a set of skills. I continue to do it partly because of the intense connections i feel, but also because I can be very thoughtful and introspective about what is going on because it is (ALL) built on communication. Rewarding relationships are all beautiful and unique and online D/s is no exception.
I have had a range of experiences with RL dynamics, online dynamics and online that have 'converted' into RL dynamics. My experience is that the 'online' experience can be very intense and certainly the submissive girls I have interacted within a dynamic have easily found their submissive place. From the D side, getting the infrastructure in place (understanding the chosen methods and techniques) can be some work, but is very rewarding. My own experience is also that the online D/s relationships tend to be shorter and I think this is because online relationships are inherently unstable: it only takes one person to walk away for a time and trust is lost for good. However, the flip side is that such dynamics allow you to hone your relationship skills. With a physical relationship you can hide the mistrust and flaws in the relationship by having sex or otherwise distracting yourselves. In an online relationship there is no hiding - if you cannot communicate well things fall apart very quickly.
Can a D/s relationship work online? Yes, absolutely, it can be highly rewarding and very thought provoking. Is it for everyone? Probably not. Is it the same as a RL connection? There are some similarities but i think it is best to think of it as a different beast within which you can explore your D or s side.
Hope that helps.
Carraway