This is silly. If the universe is deterministic, any representation of matter can be locally simulated based on algorithmic calculation. This includes people, objects, everything. I don't need to simulate everything constantly because I know where it will be when I _need_ to simulate it.

So, any smart simulation would only be simulating a small very percentage of itself at any given time -- that part of itself being viewed or interacted with by observers. And we would have absolutely no idea how many of those observers actually reside in any given simulation. 10? 100? 1m? Who knows!

But we could take this even further and suggest that it is only the _experience_ of the universe by ourselves that is being simulated. In that case, we're not actually interacting with anything, we're only gaining the memory of having interacted with it (in 'real time'). In this case there's no physical reality at all! We're living in a large shared hallucination, that once again only 'exists' where and when we're interacting with it.

Finally, we have no idea of the time scale. The time scale in the simulation could be much slower than the outside universe. This would lower the energy required to simulate it even further.

So, no, it's totally possible we live in a simulation!