Sooner or later everyone who's serious about playing bluegrass music in a jam setting will learn the 'number system'. Called different names by different people in different geographic locations about the country and world, the system is the same wherever you go, which is why it's so useful. The number system allows pickers to call out chord changes that everyone in the circle will recognize, regardless of whose using a capo at whatever fret.
We've included a few links here that explain the number system; if you know of a better explanation we are, as always, interested in hearing about it.