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Virtualization is the act of creating a virtual (rather than actual) version of something, including (but not limited to) a virtual computer hardware platform, operating system (OS), storage device, or computer network resources. Virtualization is usually the creation of a system that executes separate from the underlying hardware resources, or the creation of an entire desktop for systems located elsewhere, similar to thin clients.
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or you can use unewbootin here
to do this with a VM you will need to attach the USB to the machine first and make sure your boot order on your virtual BIOs is set to boot from USB