The Blacksmith is an NPC service character that will "Reforge" your gear for a fee, depending on the Rarity of your gear. For example, Common items can be reforged for 250 coins, while Rare items are 1000 coins to reforge. However, after the player completes the Blacksmith’s first quest and mines 10 coal, he offers to reforge a piece of armor for 10 coal.
There is an Anvil next to the Blacksmith, allowing the player to enchant their gear using books at the cost of experience levels.
Finding the Blacksmith
The Blacksmith's Quest
After the quest he can be found in front of the Gold Mine as well at x=-40, y=77, z=-300.