tailcalled comments on Simulations Map: what is the most probable type of the simulation in which we live? - Less Wrong
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It could be that the 'external' world is completely different and way, way bigger than our world. Their world might be to our world what our world is to a simple game of life simulation.
If the hypothetical external world in question diverges from our own world by a lot then the ancestor simulation argument loses all force.
Of course, but OTOH, we have simulated a lot of tiny, strange universes, so it's not completely implausible.