The Blood Knot with Outward Coil is most usefully employed for joining sections of monofilament nylon line while maintaining a high portion of the line's inherent strength. Other knots used for this purpose can cause a substantial loss of strength.
In fly fishing, this serves to build a leader of gradually decreasing diameter with the castable fly line attached at the large diameter end and the fly or hook at the small diameter end.
The principal drawback to the blood knot is the dexterity required to tie it. It is also likely to jam, which is not a concern in fishing line, which is no great loss to cut, but may be a concern in normal rope.