I have a short story/satire I have wanted to do playing with this idea- alas I don't have the free time I used to...

Lets say you wanted to do a simulated universe... obviously you cannot simulate it in as high a fidelity as the universe you live in has- so what shortcuts might you take to make the simulation practical...?

Well, for starters you would quantize everything at a scale that makes computation possible- we do this in simulations we do for mechanical design, Finite Element Analysis- you take a structure and break it up into tiny pieces for the purposes of calculation.

You would have to come up with a self consistent physics that operates in a quantized space-time, yet gives the illusion that everything is continuous when viewed at a large enough scale. We could call it 'Quantum Physics'. While we are at it, (If we are really interested in creating simulated intelligences in this simulation) we could further simplify the computation immensely by not bothering to do detailed calculations on parts of the universe that are un-observed by those intelligences. Why simulate all the atoms under a rock on Mars if one of your intelligent beings in the simulation is not there to observe it? Just let such unobserved regions exist as vague probabilities that can be rendered in higher fidelity if and when they are observed.

If your simulated universe has only so much computational capacity per unit of volume, then if you cram too much matter in too small a volume you have a problem--- so in that case why not handle such situations by walling off such dense collections of matter from the rest of the universe, and replace it by a simple object- like a black hole. No longer any need to simulate all the particles in that volume, since now no observers can see it. Just replace it by a simple object that is defined by a few variables like mass, charge and spin...

If you are writing a science fiction story around this concept, lots of quantum physics and relativity could be explained by computational shortcuts in the simulation...

Now, I am NOT arguing we exist in a simulation, however I do think there is good reason to analyze the idea and think about why there are so many aspects of the universe that lend themselves to that interpretation.