Gray cobblestone is a crafted building block, similar to stone, only more cobbly. You can find it in the Construction section of your inventory, where it appears as a light blue-grey square with irregular divisions. This block is 1x1 square and has full collision.
How to Obtain
This block doesn't occur in naturally-generated structures such as bunkers and dungeons (January 2016), so the only ways to obtain it are either to craft it or to trade for it in a market world.
How to Use
Use this block as a basic building block when you want a slightly informal look. Gray cobblestone is not an ingredient in any crafting recipes. You can distress this block by hitting it with a hatchet. Note that mining distressed cobblestone returns stone rubble, so before distressing it, be sure you have it situated the way you want.
Cobblestone blocks were released in late 2014/early 2015.