Virtual reality is not a new term, but it has gained tremendous attention lately. The advent of 3D graphics and stereoscopes contributed to the state of virtual reality as it exists today. The following diagram illustrates the basic concept of stereoscopes and how they create virtual 3D images:
As you can see, the same image is presented twice from different angles. This results in a virtual 3D image. The same concept exists for videos.
Conceptually, virtual reality is fairly simple. It is the creation of a synthetic and believable virtual environment or world. There are two basic components: hardware and software. The hardware components typically involve a headset that has an individual lens for each eye and one or more display panels behind each lens. Most often, we are inserting our mobile phone into the headset, instead of having the display panels. Specialized lenses are used to focus the light from the mobile phone surface onto your eye's retina.