A couple things to add.<p>For notation, we would often see the basis vectors named (e_1, e_2, e_3) instead of (x, y, z).<p>The quaternions are the even-ordered subalgebra of the 3D exterior algebra. The exterior algebra has scalars (1), vectors (x, y, z), bivectors (xy, yz, zx), and pseudoscalars (xyz). The even-ordered subalgebra is scalars and bivectors (1, xy, yz, zx). Adding or multiplying two even-ordered multivectors will always give you an even-ordered multivector, and 1 is even-ordered, so the even-ordered multivectors form a subalgebra.<p>We can also conceive of this subalgebra, the quaternions, as a Clifford algebra. Clifford algebras are generalizations of exterior algebras. Instead of saying v * v = 0, we can put something else on the RHS, and for quaternions we can start with just two basis vectors e_1 and e_2, and then define e_1 * e_1 = e_2 * e_2 = -1. The third basis vector for quaternions is then just e_1 * e_2.