Lattice gauge theories describe fundamental phenomena in nature, but calculating their real-time dynamics on classical computers is notoriously difficult. In a recent publication (Martinez et al 2016 Nature 534 516), we proposed and experimentally demonstrated a digital quantum simulation of the paradigmatic Schwinger model, a U(1)-Wilson lattice gauge theory describing the interplay between fermionic matter and gauge bosons. Here, we provide a detailed theoretical analysis of the performance and the potential of this protocol. Our strategy is based on analytically integrating out the gauge bosons, which preserves exact gauge invariance but results in complicated long-range interactions between the matter fields. Trapped-ion platforms are naturally suited to implementing these interactions, allowing for an efficient quantum simulation of the model, with a number of gate operations that scales polynomially with system size. Employing numerical simulations, we illustrate that relevant phenomena can be observed in larger experimental systems, using as an example the production of particle-antiparticle pairs after a quantum quench. We investigate theoretically the robustness of the scheme towards generic error sources, and show that near-future experiments can reach regimes where finite-size effects are insignificant. We also discuss the challenges in quantum simulating the continuum limit of the theory. Using our scheme, fundamental phenomena of lattice gauge theories can be probed using a broad set of experimentally accessible observables, including the entanglement entropy and the vacuum persistence amplitude.