Creating virtual hard disks (VHD or VHDX) in Windows 11 23H2 and later is straightforward through the Settings app. Users can create a VHD by navigating to Settings -> System -> Storage -> Advanced storage settings -> Disks and volumes, where they can choose to create a VHD or Dev Drive. The VHD format supports up to 2040GB, while VHDX supports up to 64TB and offers resilience during power failures. VHDX can be encrypted with BitLocker for password protection. Virtual disks can be shared over a network, enhancing efficiency by eliminating the need for physical media. They are cost-effective compared to physical drives, reducing hardware costs and potential points of failure. The Hyper-V hypervisor provides a versatile platform for these virtual drives, which offer portability, flexibility, ease of sharing, efficient backups, and robust security, though they may have slower performance than SSDs and limited native boot support for Windows.