Rhyloite is a light-colored, extrusive, igneous rock composed of the same minerals as granite. The difference is that most of the crystals are so small that they can't be seen with the naked eye, whereas in granite the crystals are big enough to see (> 0.5 mm).

Rhyolite is aphanitic , glassy, or vesicular. Rarely, is it flow-banded, with the bands varying in color. Icelandic rhyolite often contains small phenocrysts, mainly feldspar crystals. Rhyolite is usually a light grey, pink, purple, or yellow color. If purple it may appear quite dark. Generally, it can be seen in the field as conspicuous light patches in mountain sides.

Rhyolite forms from lava that is extruded out of a volcano. Compared to basaltic lavas, rhyolitic lavas are very viscous. They flow slowly like tooth paste squeezed out of a tube. High viscosity causes them to pile up as a lava dome . This type of lava is relatively common in Iceland, making up about 2 to 5% of the total volume of volcanic rocks. Rhyolite occurs in all geological formations of Iceland, but mainly in central volcanoes. In many places rhyolite has intruded into older formations forming dikes. Sometimes rhyolite magma is so rich with gas that it erupts explosively and forms thick layers or pumice and ash, or it erupts as a glowing avalanche to form ignimbrite layers.

Obsidian can be formed when rhyolitic magma is cooled rapidly such as on lava surfaces or at surface contacts with dikes. Obsidian is jet black in color and has a glassy luster. When broken it is very sharp.

Most of the rhyolitic lavas in Iceland formed during the Pleistocene epoch, or earlier time periods. Many rhyolite domes were formed as a result of dome extrusions or explosive eruptions, many of which were at least partially subglacial. Rhyolite lavas were also common in the Tertiary Period.

Information provided by Patrick M. Colgan, Northeastern University
http://www.casdn.neu.edu