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Did you just want to redirect all http traffic to blog.yourdomain.com? One method to do this is to create a catch-all DNS entry and then create a virtual host (or server block) with your webserver. For DNS
CNAME * yourdomain.com.
Note the period at the end above when entering the record in the DO control panel.
Search the tutorials to match your distribution and webserver; search for the string “virtual host”. In your case, set the default virtual host or server block to handle blog.yourdomain.com.
If you want requests for other domains to be redirected to blog.mydomain.com (i.e. the user always sees ‘blog.mydomain.com’ in their url bar), then you need to set up a 301 redirect. This is accomplished via your web server. Let me know what server you are using, and I’ll show you how.