What is a bitcoin blackmail scam?

Could you elaborate on what a Bitcoin blackmail scam entails? I've heard of this concept but would like a more in-depth explanation. Is it when someone threatens to reveal sensitive information about an individual unless they pay a ransom in Bitcoin? How common are these scams, and what strategies should people employ to avoid falling victim to them? Additionally, are there any specific signs or indicators that someone might be a target of such a scam? Your insights would be greatly appreciated.