A cypher (cipher) in Hip-Hop is an informal gathering which consists of 2 or more individuals, with each taking turn after another in to display their talent. Cyphers have a set order, when the current person is done or starts to fall off, the next individual goes. Though most cyphers include rappers free-styling, a cypher might just be a group of break-dancers displaying their talents, or a group of individuals smoking weed.
Freestyle cypher is a gathering of rappers to drop a freestyle, those gatherings are friendly and mostly consist of rappers rapping about their current state of mind. BET usually has a freestyle cypher which allows numerous rappers to display their lyricism in the award shows.