The Gravastar theory is one designed to replace the black hole. Instead of a star collapsing into a pinpoint of space with virtually infinite gravity, the gravastar theory proposes that it is instead transformed into a spherical void surrounded by a form of super-dense matter.
The gravastar's name origin is simply: GRAvitational VAcuum STAR.
While the matter that a gravastar is made of has not yet been proven to exist, neither has the black hole which was conceived during World War I by the German astronomer Karl Schwarzschild. Nevertheless, the black hole theory is currently very well established and the gravastar theory is a newcomer to the field.
The tremendous amounts of entropy that a black hole is said to have (a blackhole apparently has a billion, billion times more entropy than the star it formed from) cannot yet be explained; there does not seem to be anywhere inside a black hole where such entropy would exist. The Gravastar is theorized to have very low amounts of entropy, thereby eliminating the need to answer the question. The violent creation of a gravastar might explain gamma ray bursts that are thought to possibly be associated with black holes.
A problem with the theory over the creation of a gravastar is whether or not a star would be capable of shedding enough entropy upon implosion.
Externally, a gravastar appears similar to a black hole; it is visible only by high-energy emissions it creates while consuming matter. Astronomers observe the sky for X-rays emitted by infalling matter to detect black holes, and a gravastar would produce an identical signature.
Inside a gravastar, space-time would be "totally warped" by the extreme conditions there and the inner space would exert an outward force. Around this void would be a "bubble" of incredibly dense and durable matter. The phase of this matter is theorized to be similar to an extreme form of Bose-Einstein condensate in which all matter (protons, neutrons, electrons, etc.) goes into what is called a quantum state creating a "super-atom".
According to the theorizers Emil Mottola and Pawel Mazur the universe itself could very well be the inside of a giant gravastar.
