Blood spots are usually found in or just next to the yolk of an egg. They are caused by a tiny blood vessel in the ovary that gets broken and leaves a small spot of blood next to the yolk as it passes through the oviduct of a hen.
Highly active hens around the time of ovulation can increase the chances of blood spots in eggs. Rutin is a substance found in grass which helps to stop bleeding, so you may find hens that produce eggs with blood spots in them improve if they have a good supply of fresh grass or free range grazing on grass.
Commercially, eggs go to packing stations where they are candled before being packed and sold. Eggs with blood spots are removed but they are not wasted, they are used in processed foods where you don’t notice the blood spot.
You can still eat eggs with blood spots, it’s just not very appealing to most people. They can usually be removed off the top of the yolk once an egg is cracked into a bowl using two spoons. Blood spots seem to be more common in chickens than other poultry.