There’s a somewhat common fascination with the question of whether the reality we experience is a simulation, or actual “reality.” However, the question of whether we’re living in a simulation is not actually a well-formed question, and I think distracts from more interesting and important questions.
There are two fundamental problems with the question of “whether we are living in a simulation”. The first is that it presumes that physicalism is correct, but that’s fundamentally unprovable. But let’s gloss over that for a second, and take physicalism being correct as a given.
There’s a second problem here: what a “simulation” is is rather ill-defined. When looking at computers, we have a relatively easy way of talking about simulation and emulation. A virtual machine can emulate x86 only because there is a detailed x86 specification for it to emulate. Since there is a externally defined specification of what x86 is, we can look at the holistic system of a physical computer running a virtual machine and make statements about which things are happening “in the virtual machine” vs “in the host system”. But with physics, we don’t have anything like that. We still don’t have a holistic model of physics, so we don’t have an easy line that we can draw to say that particular things are “inside” or “outside” a simulation.
One could say that a simulation has the property that things inside the simulation cannot affect things outside the simulation, but this typically isn’t true of simulations in the real world, for a variety of reasons (if you’re running a virtual machine, you’re usually making decisions based on the output of the virtual machine, and in any case, operations inside the virtual machine can have effects on the host system like generating heat/noise/etc). And in addition to that, using causality to determine what is a simulation is too restrictive: the insects and plants inside a terrarium, for instance, do not have any more causal impact on what happens outside the glass than a virtual machine has on what happens to the host system, but most people wouldn’t recognize a terrarium as a “simulation”.
Merriam-Webster defines a simulation as:
The imitative representation of the functioning of one system or process by means of the functioning of another.
“Imitative representation” is key here. “Imitation” requires something to imitate — we can’t talk of simulation without talking about what is being simulated. A simulation is not an object, but a abstract line we choose to draw in a holistic system. Different ways of drawing that line will allow us different insights about a system, but it’s not useful to ask which side of the line we fall on without first knowing what insight we hope to glean from choosing to draw a line in the first place. In order to usefully talk about whether we’re living in a simulation, we need to figure out what definition of simulation we actually care about, which is actually a really complicated question.