what do physicists mean when they say we potentially live in a simulation?

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I get what a simulation is, at least in the very literal sense. What I’m experiencing feels like reality, it would have to, it’s all any of us have ever known. But what would it mean for us if we truly lived in a simulation? Can it just be turned off and we cease to exist? If we found out we did live in one, how could it change our reality? How do we even hypothesize such a thing? I have zero background in physics just so we’re at an understanding of my physics understanding.

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