Snake oil is historically a patent medicine beverage or ointment concocted from various inert ingredients (commonly including alcohol or stimulants) and sold as a cure for various (if not all) diseases and ailments. The essence of "snake oil" is that the ingredients are unidentified, mysteriously alluded to, or mis-characterized, and generally the product has an unusually wide application as a cure-all or panacea. References to currently fashionable pseudoscience may bolster the product's claims. Often sold with boisterous marketing hype and promoted by travelling "doctors" with dubious credentials, and perhaps an accomplice in the crowd who will attest to the value of the product. Sometimes seen in films depicting the United States of the 19th and early 20th centuries: often the snake-oil salesperson has to leave town in a hurry when the inhabitants start to realize that they have been conned.
In cryptography, the term snake oil is used for bogus cryptographic claims, often including claims of secret algorithms with vast key lengths or that eliminate the need for any cryptographic key at all. This usage is due to Bruce Schneier.