Two possibilities exist:
1. We are in the "true reality", the Real.
2. We are not, and we are simply part of a simulation of reality.
Consider the following:
1. We as humans have been creating simulations for some time now, with increasing levels of sophistication overtime.
2. As technical ability increases, our ability to create more sophisticated simulations also increases.
3. As our ability to create more sophisticated simulations increases, we get closer and closer to being able to produce a simulation that can mirror how physics itself works in what we understand as our "reality".
4. All things are a result of physics- from fire, to life itself as we know it.
5. Therefore, from the ability to simulate physics, we should eventually be able to have those physics interact in such a way that they would produce a simulated version of what we understand as "life".
6. As the sophistication of our technology increases, and the resources we are able to utilize increases, we can create larger and larger forms of these simulations, eventually reaching to a scale that we might consider "universe-sized".
Assume the following:
0. As time increases, technological ability and resource utilization of a civilization increases.
1. As a civilization acquires the technological ability to create a simulation, they inevitably will, as it offers a powerful way of acquiring new knowledge, and evaluating/exercising existing knowledge.
2. So long as this civilization survives, they will continue creating and using these simulations, to the extent of their technological ability at any point in time.
3. This civilization will eventually reach a point where they can simulate the physics of their reality at scale.
4. It will be in this civilization's interests to create as many of these sophisticated simulations as is feasible.
5. Suppose a question this civilization wishes to answer is possibly something along the lines of: "What would things look like if the Big Bang were to happen in a certain way?".
6. Suppose the civilization attempts to answer questions like this one via creating one or more simulations of a reality that they model to be as close as possible -if not identical- to their very own.
Other relevant propositions:
1. In the "true reality", existence must be infinite, as there should be nothing that would create arbitrary limitations (we should have the assurance that if we travel 10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^10^... trillion km in one direction that we won't run into any "boundaries", no "invisible walls"). Therefore, if we were to discover some phenomena that might be described as an arbitrary limitation, it could be considered evidence that we are not in the "true reality".
2. The Law of Infinite Probability could be interpreted in such a way that would imply that, in the "true reality", where existence is infinite, there will inevitably be an infinite amount of civilizations that will advance to the point where they can develop these sophisticated simulations. Therefore, we can also then derive that there will be an infinite amount of these simulations, and therefore there should also exist an inevitably infinite amount of simulations that match identically to what we know of as our "reality". (This is a whole other rabbit hole of stuff that I think is wildly cool but requires a significant time investment itself to talk about in any capacity.)
I think that if you buy into the above in any amount, the apparent chances of us being a simulation vs not are impressive, and we just have to hope no one trips over a power cord.