A Blood Gem is a gem created with Black Magic and is used for communication with the wearer which is unheard, unlike mental communication. The creator of the gem can see and hear everything the wearer can.
In The High Lord, Kariko makes a Blood Gem from Rothen's blood and makes him see all the deaths by Kariko. Later Akkarin and Sonea make Blood Gem's for each other. We learn that they are made by melting glass and placing a drop of blood on it to imprint it, then attaching it to a band of metal to wear it in ring form, making sure a small bit of the glass touches the skin. Blood Gems can also be worn in less obvious ways, such as the one Tavaka wears, which is in a tooth.