When I say that this world is software and not hardware, that it is an illusion and not the actual reality, what do I actually mean by that?

The concept of world as an illusion is not new. In vedanta, it is known as maya, the dreamlike world-illusion that obscures the reality of brahman. The problem is, people take this too literally and then they fail to take this world seriously enough, which is a very dangerous mistake, because this world is not an illusion on the same level of understanding on which your dreams are illusions, or where hallucinations are illusions. In order to understand this properly, we need to introduce the concept of “reality levels”. Reality level 0 is the absolute reality, which is not defined in anything other than itself, and in which every other, lesser reality is defined. What vedanta actually says, is that brahman is reality level 0, and reality level of this world is > 0.

As an example, let’s say that reality level of this world is 1. My physical body, chair, desk and computer are defined on that level; they are all objects on reality level 1. However, reality level of Geralt and Yennefer characters in the Witcher game is 2. I we extend the level of abstraction more and make it possible for the virtual character to be conscious and to have dreams, his dream’s level of reality would be 3. So basically as we spawn illusions within illusions, we increase the reality level, or, more accurately, illusion level.

Many “battles” were fought over this within various schools of vedanta, because they didn’t define things properly, and I remember a funny story about one of the gurus of the Gaudiya-vaishnava sect (known in the West as the Hare Krishnas) who used to beat the advocates of advaita vedanta on the head with his shoe until they admitted that the shoe is real and not an illusion. What the vaishnava guru didn’t understand is that for the shoe to hurt the head, the shoe being real isn’t really a prerequisite. It only needs to exist on the same level of reality as the head. For instance, in the Witcher game the wolves don’t need to be real in order to hurt the main character. They only need to exist on level 2 reality. If they exist on level 2, they can hurt Geralt, and if they exist on level 1 they can hurt the player, but not Geralt. If they exist on level 3, basically within Geralt’s dream, the worst they can do is wake him up.

So, what advaita vedanta actually says, and what Hare Krishnas fail to understand, is that atman/brahman is level 0, the whole maya concept is level 1, mahat-tattvas are level 2, universes with mahat-tattva specific laws are level 3, and so this Universe we live in is a specific case of a level 3 reality universe, and within that all material entities are level 3 real. This means that shoe and head are both level 3, and that they interact on the same level of reality, but that the entire thing is an illusion 3 levels removed from the actual reality, which is atman/brahman.

I introduced the term “mahat tattva”, which is usually explained in very obscure ways but it’s actually very simple. It’s the basic set of laws that makes a Universe. You can have a law-set that spawns astral universes, a law-set that spawns causal universes, and a law-set that spawns material universes. In programming, you’d say that a mahat-tattva is a class, and a universe is an object. An object always belongs to a certain class. I might have slightly modified the original teaching of Vedanta here, but this modification is an improvement for the sake of clarity.

The next thing that seems to be poorly defined in Hinduism is that mahat-tattvas are not parallel, but nested. This means that within maya you have causal mahat-tattva as the “root directory”, and within it you have instances of causal universes, within which you can have causal entities of all kinds, among which one is the astral mahat-tattva, as a subdirectory within which you have multiple instances of astral universes, and within each astral universe you have many astral structures, worlds and entities, one of which is the material mahat-tattva, as a subdirectory within which you have multiple instances of material universes. Since astral entities and structures have ownership structures, the being who thought of making a material mahat-tattva actually owns it, and if any astral or higher being wants to experience this sub-directory of the astral universe, he can do so only with permissions that are less than those of the owner.

It sounds complicated, but this is actually the most organized and simplified explanation I could think of, and the original explanations of vedanta are much more chaotic, laced with mythology and more difficult to grasp.