A few more details on my setup: I am using a QCX connected to a very cheap USB soundcard connected to a raspberry pi 3B. The loopback device is just software created with the following command: sudo modprobe snd_aloop The result of this is a virtual device and data is copied from one end (DEV=0) to the other (DEV=1) and also in reverse direction. So I would call this a virtual audio channel but I am not sure if this answered your question. I am no experienced programmer and found the topic of audio devices under linux very confusing. So I just tinkered around until I got it working finally. However, one end of this loopback device is the sink for the GNU radio script and the other is the source for wsprdaemon.
I am happy to support by testing something or providing more details.