My best guess about the future is eventually we will all be “uploaded into the cloud.” (awkward, but it gets the meaning across)
It’s tempting to say we’ll all be living in a ‘simulation’ at that point. But, I think by that point we will select a new term.
When we say ‘simulation’ we mean something somehow inferior or an approximation to the ‘real thing.’ The problem with that notion is our perception of the ‘real world’ is always an inferior approximation of the real thing.
Therefor experience and perception are always a ‘simulation’ of the ‘real world.’
If we live in the cloud, and we experience a world that is generated for us by algorithms, as long as that experience is AT LEAST as accurate as our ‘real-world’ experiences were, then I don’t think it’s fair to call it a simulation anymore.
It’s something more. It is a ‘chosen reality.’ In some sense it will be inferior since the ‘real world’ will always be more complex and nuanced than our generated ones. But the difference will be beyond our ability to perceive it. Our chosen reality will be superior perceptually. It will be the reality we want, not the one forced on us.