The term “virtual” is used to describe the state of being such without actually being such. In this context, virtual reality can be defined as the state of being real without actually being real. The problem with such a definition is with the inference made about the state of reality or virtual reality.
Obviously, such definition implies an intelligent independent observer having knowledge of both states and who can discriminate between the two. It is therefore a non-useful definition in terms of local observers in either state with no knowledge of the existence of the other state.
Most people think of virtual reality as an artificial reality created using digital computers. Aukstakalnis and Blatner gave a definition as follows :
Virtual reality is a way for humans to visualize, manipulate and interact with computers and extremely complex data.
In the context of the definition above, the observer is situated in his own reality and interacts with a virtual reality through some mechanical means. This is also not a useful definition in terms of a local observer in a virtual reality reference frame.
Let us consider the case of an observer who is located inside a virtual reality reference frame, being a part of it. Let us also assume that the observer has no ability to interact with the outside world, whatever that world may be. The observer can only interact within the limitations set in his virtual reality and his relation with the external world is limited only to the fact that he is allowed to exist and interact inside his virtual reality. What type of reality is this for that type of observer?
Obviously, for a local observer that is not a virtual reality, since he has no way of knowing or proving such. Then, it has to be a reality, from this “local” reference point of view. Furthermore, it may make no sense to consider this reality as virtual, since that’s the only reality of the local observer. Unless someone comes along and proves that he comes from the “outside”, which is what creates this reality, then the local observer will have no way of knowing that his reality is someone else’s virtual reality.
At certain times, the local observer in the virtual reality space may become aware of certain internal interactions, or phenomena, that seem to lack an observable mechanism for cause and effect. For instance, he may not be able to understand the mechanism that causes him to always stay attached to the surface of his planet. He theorizes that there must be some type of mechanism of interaction, similar to the one allowing him to interact with other objects around him. When he pushes objects they move and the observer theorizes that he transfers some kind of energy to the objects. In the same context, he feels that what holds him on the surface must be due to the transferring of energy to or from him. More importantly, if such interaction is always present he hypothesizes of its mechanics. Is it a type of magnetic pulling or something like a pressure from above? Obviously, the observer is not aware he resides in a virtual reality reference frame where interactions can be due to virtual causes and a direct energy transfer from cause to effect, or vice verse, is not necessary, as in the though experiment of the previous section. In other words, a presumed cause may have virtual nature in a virtual reality. The effect of the observer staying attached to the surface may be just due to his very own existence, which in turn is governed by the laws of medium of the virtual world he is situated in, the only world possible to exist for him.
In the above context a functional virtual reality is defined here as follows:
A functional virtual reality is the type of reality where there are some causal connections that are virtual, in the sense that there is not any energy transfer between a cause and its effect.
From the point of view of a local observer in a virtual reality world it is irrelevant whether energy is transferred from a virtual cause to its effect or an equivalent amount of energy is transferred from a medium facilitating the virtual reality and the specific effect. Such a “background” operation makes it appear that there is a cause and effect relationship. Thus, a local observer cannot differentiate between reality and virtual reality. In such cases, describing an effect using virtual causes allows suitable physical laws to be developed. Therefore, one could state that there is equivalence between reality and virtual reality in a certain sense:
Equivalence principle of reality and virtual reality (EPRVR):
A virtual reality that allows expressing physical laws in terms of virtual quantities is equivalent to a reality and it can be treated as such.
By “treating” a virtual reality as a reality is not meant actually transforming it into a reality. When a virtual reality is “treated” as a reality, the physical laws devised describe effects in terms of causes that are of virtual nature. This allows making accurate predictions about dynamic states in a virtual reality without the need for an explicit description of the process and mechanisms facilitating it. I call this type of virtual reality “functional”.
An example of a pair of a virtual cause and its effect in a functional virtual reality  is the gravity force and planetary orbits, respectively. This cause-effect relationship can be used in developing physical laws that make accurate predictions, such as the law of universal gravitation developed by Isaac Newton does. More importantly, it allows treating a virtual reality as a reality in a larger scheme of things. Although conceiving a physical law about a phenomenon in a functional virtual reality that obeys the equivalence principle of reality and virtual reality is not a trivial task, the danger comes from its interpretation. If the interpretation remains within the domain of the principle, the physical law can be a very useful tool in making predictions. If the interpretation of the physical law is not restricted to its predictive power but it is used in an ontological sense, then it can lead to distorted views of physical reality and put science in disarray in the search of dubious causes.
 Aukstakalnis Steve, Blatner David, Silicon Mirage: The Art and Science of Virtual Reality, Peachpit Press, Berkeley, CA, 1992.
 Harokopos, E., Beyond Intelligent Design: From an autonomous universe to a functional virtual reality, CreateSpace, 2015