Are we living in a computer simulation?

As our computing capabilities increase, we are forced to realize that eventually (whether in a few decades or a few hundred years) we will be able to make computers so powerful that they could simulate entire worlds, complete with virtual inhabitants who may not be aware of their of their simulated status.

But this forces to ask, "How do we know that this hasn't happened already?" We may be those simulated inhabitants! Nick Bostrom argues that it is very possible, even likely, that we are (HT: Mad Latinist via email):

ABSTRACT. This paper argues that at least one of the following propositions is true: (1) the human species is very likely to go extinct before reaching a “posthuman” stage; (2) any posthuman civilization is extremely unlikely to run a significant number of simulations of their evolutionary history (or variations thereof); (3) we are almost certainly living in a computer simulation. It follows that the belief that there is a significant chance that we will one day become posthumans who run ancestor-simulations is false, unless we are currently living in a simulation. A number of other consequences of this result are also discussed.

I don't think that this possibility should have much impact on our daily lives, but it is fun to think about. It does introduce a frightening possibility though: that our own computational devices could "crash" or "hang" the computer running our universe! Of course, I suspect we wouldn't be aware of any slowdowns in the computer running us, any more than a character in astory is aware if the story is being read quickly or slowly. But if the simulation were to end, that would be bad. Of course, I don't think we'd have any way of knowing what would or would not cause the simulation to end. So I'm still going to go about doing what I'm doing.