Obsidian Ore is found in Obsidian Nodes embedded in rocks on the Fossil layer not far below the surface and also inside of rocky Mountains and canyons. Nodes are sometimes visible in the walls/floors/ceilings of caves or can be discovered by digging mineshafts yourself.
Obsidian Nodes - like all nodes - cannot be pulled with gauntlets / Power Cells, instead they require one Extractor each to harvest the Obsidian ore inside.
- Basic Extractors will extract 6 Obsidian Ore from 1 Obsidian Node within 5 minutes
- Advanced Extractors will extract 12 Obsidian Ore from 1 Obsidian Node in 2:30 minutes
- Super Extractors will extract 18 Obsidian Ore from 1 Obsidian Node in 1:30 minutes
Obsidian Nodes are blocks you can neither take nor place. Obsidian Ore can't be used for any crafting-recipes directly as of now (R25 in November 2015), it has to be smelted into Obsidian (bars) via the Forge (needs Fuel too) before it can be processed any further.
Obsidian in its processed form is needed to make Obsidian Mining Cells, Iron Mining Cells, Diamond Mining Cells, Obsidian armor, Iron armor and Diamond armor, Obsidian Swords, Iron Swords and Diamond Swords, Advanced Extractors, Super Extractors, Plows, Washers, Teleporters, Cooking Stations, Healing Beacons and other useful items.
Obsidian Ore can also occasionally be obtained by Silver Keepas or Golden Keepas, or can be found in Iron Treasure Chests on the Lava layer underground, (or in player-made biomes built of rocks from this layer) and very rarely in Obsidian Treasure Chests on the Stalactite layer underground, also.
If you use Excavators, then these will remove all surrounding natural blocks, but will leave the Nodes with the ore inside intact. They will save half of the removed blocks in Loot-Bags. Basic Excavators can only remove blocks up to the hardness of Stone, but will leave harder rocks intact, Advanced Excavators will also remove blocks like Bedrock, Limestone and Magnetite found on the Fossil layer.
The real life obsidian is a type of Igneous Rock. This game does not allow either to be transformed into the other. Any attempts to combine water and lava will only result in hardened lava. Currently, the only way to farm obsidian infinitely is by finding and looting from Treasure Chests.