By what means is the blind man made terrible? Why did Bones fear him?

The blind man possessed the "black spot", which was the mark of death. Billy Bones was terrified of being given the "black spot" and with good reason. Once the blind man put it in Billy Bones hand and left the premises, Billy Bones died of an apoplexy.

We both obeyed him to the letter, and I saw him pass something from the hollow of the hand that held his stick into the palm of the captain's, which closed upon it instantly.

The captain had been struck dead by thundering apoplexy.