If you are trying to simulate a large universe full of self-aware intelligent being who at some point also try run these simulations. And if these simulations

If you are trying to simulate a large universe full of self-aware intelligent being who at some point also try run these simulations. And if these simulations eventually become N layers deep. At some point one of these generations is going to run into the limits of the simulation engine's computing power. Since each supervising intelligence is watching the layers below them (and indeed started the simulation) they obviously know that those sub-layers are simulations but they don't know whether they themselves are simulations. Unfortunately, even the simulation that hits the limits can't tell whether they are computational limits or simply facets of their universe. My short opinion ... It's turtles all the way down. At least until it stops but the question here is whether there are any turtles up.