I know this is not a totally formal argument, and it is not mine, I just tried to distill it as much as I could to find where the weakest point is. Please help me if you want. It goes like this:
H (hypothesis): we can create self-conscious entities in a virtual reality simulation
T (thesis): H implies either that (a) there are non-physical (in the sense of Platonic) self-aware entities; or, (b) The universe itself is non-physical.
How to go from H to T:
1) the simulation runs in discrete time steps. By symmetry (or lack of a preferred time scale), the separation in time between time steps does not change H. Nor should the time it takes to complete a time step, thus the size of a time step itself. Nor if all time steps are simultaneous.
2) From (1) we can run the simulation at any speed even the micro-steps within every time step.
3) Every micro step corresponds to a configuration of the computer. It should not matter how we reach each step, either by "computing" it or by a look up table (that is, there is no meaningful difference between initial data and computed data).
4) The look up table and a computer reading it is all needed. The H self-aware entities become conscious as the computer performs the reading. Then: is it important "what" performs the reading? Should encryption matter? the data from the table can be transformed by a computable function before being put into a computer. Does that transformation affect the consciousness? It should not because the simulation should be arbitrary up to at least a computable function. It should not matter if we are able to watch the beings in a screen or if the simulation is encrypted so no outsider can "see it". Same with the computer: it can be any arbitrary machine that is equivalent to the original as far as we can computably pair the states of the original machine with those of the new one.
5) It follows from (1), (4) : it only matters the existence of the lookup table itself, not the specific implementation. The machine is arbitrary, it can be the book itself where the look up table is printed.
6) A book with a printed look up table should generate self-conscious beings. But how does it operate? Not in time certainly. Or, it could be regarded as a computer that operates at infinite speed, meaning all states of the simulation (all time steps) are on memory simultaneously.
7) Does the physical existence of the book matter at all?
I think now that the H I am assuming is actually (a). So this is not really an argument at all! (or it is rather some kind of tautology). But still I would like to hear more opinions. Thanks!