Unobtainium is an object that is purchased from The Contraband Salesman for $450,000.
If you have the Discount Shopper cheat enabled, you can buy it for 225,000.
You can find the Contraband Salesman behind Skye's Bar at evening and night selling many rare items, including the Doomsday Glock.
It can be used to upgrade the Weathered Sledge Hammer to the Heavy Sledge Hammeror the Heavy Sledge Hammer to the Super Sledge.
To do this, bring the weaker sledgehammer along with the unobtainium to the laundromat, and speak to 'Recon' Bob Yewlaiter.
It's really heavy; looks like some kind of super-dense element.