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“”Reality is that which, when you stop believing in it, doesn't go away.
|—Philip K. Dick|
Reality is basically something that is "out there," that is made of facts and truths and is something that everyone should be able to agree on. In reality, reality is actually a lot more philosophically complicated, unfortunately.
In David Deutsch's Fabric of Reality (1997), it is argued that we are "living in a simulation," but one of our own making. Every one of us constructs reality in his or her own mind, and renders it as a virtual world. Whatever is 'out there,' if anything, is nothing like the world as we perceive it through our senses, and our interpretations of those perceptions are simply a way of making the best sense we can of those current sensory inputs in terms of our past experiences (and our past interpretations of those experiences). In addition, our perceptions are not necessarily the most accurate for representing reality, but rather those that have been favoured by natural selection (making us prone to certain biases). We are not so much "simulating" reality as constructing it moment by moment on the basis of evidence and hypothesis, and imbuing those constructions with meaning. This has profound implications for the nature of reality per se.
 Philosophical and psychological considerations
The idea that reality as we perceive it does not actually exist, and that we are the constructors of our own reality is not a new concept; phenomenology as a philosophical position and radical constructivism as a psychological theory of mind posits that each person is unique and alone, interpreting and constructing the world anew at each moment in time. In constructivism, schemas are created which hypothesise how the world works and behaves; evidence is gathered, and if it fits with the theory, the evidence is assimilated, and as such can be "understood" in terms of the schema. If evidence contradicts it may be ignored, sidelined or deemed to be irrelevant. Occasionally, the weight or the nature of evidence is too overwhelming to be ignored, and the situation demands a complete rethink of the schema; it needs to change, in order to accommodate the new information. This is tantamount to a paradigm shift in an individual's thinking. Old ideas are no longer sufficient to explain the world as we perceive it, we need a new vision, a new rendering in order to make sense of our sensory data. Cool shit, right?
Therefore, in constructing our reality, on a moment-by-moment basis we are making assumptions and forming tentative hypotheses about what is actually out there; we are testing those hypotheses by prodding, peering and challenging our ideas. To illustrate this, imagine walking down the road on a dark night, when you can just about make out some shapes in the distance on the footpath. As you walk down the road, you are not sure whether a particular shape is a tramp lying in the gutter, whether it is a bundle of rags, or whether it is a large dog waiting to pounce. The mere fact that you do not consider it to be a three-toed sloth or a giant jelly baby means that even when you cannot perceive exactly what something is, already you have ruled out a lot of things that you think it can't be, and are looking for the most likely interpretations of visual and auditory stimuli. In order to make decisions about what the object is, something about the situation would need to change — and it is most likely us that would be the agents of that change; we would go nearer, we might shine a light at it, we might even be bold enough to prod it, if we were not sure. These actions provide us with quasi-experimental data which allows us to decide between competing hypotheses.
 The use of the scientific method in constructing reality
Rendering reality in our minds is not as straightforward as it seems. It is based on the application of a semi-intuitive version of the scientific method, incorporating repeated iterations of observing, hypothesising and testing.
The process is that we start with assumptions about the world on the basis of our previous "reality models" and current hypotheses and explanations. Sensory information is filtered via these models, and if consistent, logical and "explainable" in terms of the model's features, the information is assimilated. Sometimes we need to test the model, as it is unclear whether or not the selected model actually fits exactly with the data, "an experiment"; if the model does not fit, either the model is amended, or a different model is selected or even created in order to explain the phenomenon. Much of this occurs at a relatively unconscious level, for we do not normally consider how our sense impressions are manufacturing the visual, auditory and other sensory images that are being rendered for us by our brains on a moment-by-moment basis. However, some of this is done consciously, when we try to make sense of a situation which puzzles us. In doing this, we arrive at a version of reality which might make sense in our terms, but which we have no guarantee corresponds either to the version of reality constructed by others. Unfortunately, reality is personal, relative and somewhat arbitrary. Any arguments that there is something out there which is absolute, fixed and true, are essentially irrelevant, as we can never, in principle determine what that might be. We can only perceive such versions of reality in terms of our own sense impressions and our brain's rendering of them.
“”Reality has a well-known liberal bias.
Despite some ambiguous and relativistic aspects of reality, it has a way of biting you in the ass when you've been taking in too much woo.