Elon Musk thinks we probably live in a simulation and sees it as a positive scenario.

This is an interesting philosophical argument, and I like that he concludes by giving chances and not an absolute. But it has problems.

For one, any universe could be simulated. Which means that even in the parent universe, the absolute basement level of reality, it will be easy for its inhabitants to trick themselves into believing that they too live in a simulation when they actually don't. Colloquially speaking, not even God himself would ever be able to know for sure.

Second, we have no real indication that this isn't the basement level reality (though people are hard at work devising interesting experiments to probe the proposition in various ways). And to anticipate a popular misconception, the Fermi paradox does not suggest any particular answer to this question about basement-level reality.

The third is actually a constellation of problems surrounding motivation and viability. If this is a simulation, what data does its creator hope to extract? Is it a simulation of one person's experiences (a la the "Roy" video game from Rick and Morty) or is it a simulation of this entire universe including its quantum physics? What resemblance or relation do we bear to the parent universe, are we like them in any way? Are they subject to constraints like time and limited resources? These questions and others show that the simulation argument has no explanatory power, just like saying "God did it" has no explanatory power. All it does is raise further unanswerable questions.

Imagine there are 10 people in perfectly sealed boxes (no one in the box can experience anything from outside the box). The boxes will be divided into group A, containing 1 box, and group B, containing 9 boxes. As a person inside the box, how much do you know about which group you are in? Are you justified in believing there is a 90% chance of being in group B, or, lacking any information about the actual selection process, should you assume an even chance for either category? From a universal perspective, you would say 90% to be in B, but from the person's perspective, 50-50 is a better description of their actual knowledge of their state. They only know that they could be in either group and have no information about which group they are actually in. But if they collectively bet on 50-50 many more of them would be wrong than in the scenario in which they collectively bet on 90-10.

It is an interesting paradox, because it asks us to choose between what I will call betting information versus verified information. If you had to place bets, you would bet 90-10, but if you had to actually describe the state of what you know, you would describe it as 50-50. The whole endeavor of science is about going by the verified information. In science, betting information is for forming hypotheses and is strictly not to be trusted beyond that.

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