The electrolytic cell of the preferred embodiment includes an electrode pair and a cavitating jet. The electrode pair includes a cathode electrode and an anode electrode and defines an electrical path between the cathode electrode and the anode electrode. The cavitating jet, which is located along the electrical path between the cathode electrode and the anode electrode, functions to cavitate a fluid, such as water. The electrode pair and the cavitating jet cooperate to initiate a plasma state in the water. The water in the plasma state acts a virtual electrode with a higher current density than the cathode electrode and/or anode electrode. The plasma virtual electrode, through thermolysis and/or electrolysis, produces hydrogen.