Is there any hypothetical way that a crazy advanced civilization could convert matter to digital form (or energy) and back? How far away might such technology be from our current tech level, if that question can even be answered?
You should be clearer than 'digital' form. I will assume you mean scanning matter and storing it as information. It is currently feasible but they come in varying degrees of precision. We have Radar, Lidar, X-Ray Imaging, Thermal Imaging, CT (magnetic) scans, etc. A hypothetically advanced civilization could be able to accurately represent 'matter' down to atoms, however, they would not be able to represent quantum information with classical computers. That is only assuming our quantum theory is not bogus.
Converting matter into energy is quite easy, as mentioned by Einstein decades earlier. The popular equation E=mc2 that allowed us to split the atom is actually Energy equals mass times speed of light squared. We're already doing that within nuclear reactors.
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If that's possible, it is so advanced we have no way to even guess if it is. Current science would suggest, or perhaps scream in the face, that it is not. But then, who can guess at ten thousand years in the future?
The best I could think of was if you converted everything into energy and then used that energy as the 0s and 1s in your massive computer, so you energy would literally be the code and that code. But, even if that case, if you are spawned in the simulation, then that would just be a copy made with separate particles (raising the question of who is the real you--you, the other ten yous, or the you trapped as source code?). That might very technically be possible, if you could separate and accurately control particles of energy.
Current understanding of quantum physics states that such a thing is not possible at all.
The big problem is Werner Heisenburg. He's the guy who discovered that in quantum mechanics, the more precisely you know the location of a particle, the less precisely you can know the velocity (and vice versa). It's not that we don't have instruments sensitive enough to detect such things, it's that if you precisely know the location, the information about the velocity does not exist. This is called the uncertainty principle, and it fundamentally means that matter cannot be digitized to the level needed for things like Star Trek transporters. Indeed, in an interesting bit of trivia for Star Trek: The Next Generation and onward, the writers occasionally made mention of "Heisenburg compensators," a fictional transporter component that removed this uncertainty so that the transporters could work.