Right, so take it a bit further. You don't have to simulate everything that there isn't an observer on since you can create a temporal boundary between two areas.
So, translating that into physics:
1. You know you are only going to simulate for the next, say, day.
2. Take all the photons, xrays, etc. heading towards earth and continue to simulate them, but freeze everything outside of a reasonable distance (in hash life, this isn't arbitrary, it is perfectly defined).
3. Continue simulation for that sub area only.
So, translating that into physics:
1. You know you are only going to simulate for the next, say, day. 2. Take all the photons, xrays, etc. heading towards earth and continue to simulate them, but freeze everything outside of a reasonable distance (in hash life, this isn't arbitrary, it is perfectly defined). 3. Continue simulation for that sub area only.