I have the same thing growing on my new spiderwood, but I don't know what it is. Hopefully a guru can help us both. 
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Thank you so much this is great info!Yes its fungus and yes it is harmless and common in new wood to the aquarium. If I remember correctly its due to the release of sugars in the wood fiber as it decays and you can boil the wood then put it in the oven on the lowest setting for several hours or dry in sunlight for weeks the key is to get completely bone dry to the core after boiling it. Or just leave it and scoop the fungus out daily until it stops as it will go away on its own
Dan
Thank you all for your help sorry I'm not gonna tag all the posts but it's all very helpful info, does anything eat it? I saw my molly fry picking at it a bit actually cleaned another part off^Agreed.
No need to worry at all. Lots of new users come in and ask about this very issue. We always tell them it's nothing to worry about and it'll go away on its own. So far, no one has come back to complain that we screwed them over.
I hope you are not the first! Welcome to the forums.