The “Simulation Argument” was first proposed by Nick Bostrom in his 2003 paper “Are You Living in a Computer Simulation?“. While typically taken to argue that we are, in fact, living in a simulation, Bostrom’s argument actually argues that one of the following three possibilities obtains (quoting from Bostrom’s paper):
1 – “The human species is very likely to go extinct before reaching a ‘posthuman’ stage.” (Elsewhere, Bostrom refers to the “posthuman stage” as “technological maturity”, which is the term I’ll use here.)
2 – “Any posthuman civilization is extremely unlikely to run a significant number of simulations of their evolutionary history (or variations thereof).” (Bostrom later refers to these as “ancestor-simulations”.)
3 – “We are almost certainly living in a computer simulation.”
The three possibilities suggest the rough outline of the argument. If we don’t go extinct before reaching technological maturity (option 1), then we almost certainly will reach technological maturity (ie, a stage at which we’re able to run ancestor-simulations). At that point, it’s possible there’s some reason we likely won’t run these simulations despite being able to (option 2).
But if there isn’t, and there’s no reason to think it unlikely for a species like ours to reach this point, then we have to consider the possibility that this has happened before and that we’re a simulation. The remaining step is to realize that any given species might create thousands upon thousands of these ancestor-simulations and that each of those may create thousands of their own.…