Old question which I discuss without bothering to introduce it much: Are we living in a simulation?
The technical feasibility seems beyond question; we should be able to do it ourselves in a hundred years. That leaves the question of motivation. Why would an advanced civilisation model universes, or even earlier versions of itself?
Let’s note that we don’t strictly have any evidence that the whole Universe actually exists; we haven’t sent people far enough to tell the difference between a big universe and the Solar System plus coloured lights at the edge of the simulation. However, if it is a sim, then whoever put the coloured lights in did a remarkably good job, with something at every wavelength, surprises like pulsars and quasars, and the CMB – down to little irregularities! Of course, he might just be piping in the real observations of the astronomers of his own universe – in fact, that would be my best guess, since otherwise why bother with anything beyond the Galaxy? (Then again, perhaps the real universe is actually a lot bigger than this one, and he’s thinking “Well, I won’t bother with anything beyond a couple of billion lightyears, that’s good enough for sims.”)
A similar argument applies as you go down in scale. It’s at least conceivable that the Earth actually runs on classical physics, and you only see quantum effects when you run a physics experiment. This thought runs into trouble with the fact that modern computers rely on quantum effects to work; however, you could imagine that the sim actually runs the calculations on its own vastly powerful CPU, and only bothers projecting the resulting photons from the screen, with no quantum effects in the simulated chips. On the gripping hand, code to detect “This human would notice if quantum effects didn’t work properly in his current experiment” seems rather complex; perhaps it would be preferable to just throw CPU cycles at the problem and model every dang atom in the first place. That does raise the question of why one would bother with so many levels; “Who ordered that?”, as Pauli asked. There’s really no need for strange quarks and whatnot, the observable universe would run quite nicely on protons without internal structure. It seems, then, that our physics is a lower bound on the complexity of the real physics; it’s hard to see why anyone would make his program more complex than it had to be, but he might easily simplify it.
However, why would he want to simulate us in the first place? War games are one obvious possibility. Perhaps Hitler was such a gambler because he was being controlled by a player of games who didn’t really care if he won, nor indeed how many pixels were wiped out in the struggle. Perhaps Churchill’s famous intransigence was a similar kind of gamble, not actually virtuous but merely the product of having nothing to lose, and thus being able to make a grand, death-defying gesture. Who knows, perhaps the Hitler and Stalin players had some sort of contest to see who could wipe out the largest number of sims.