A spirit represents an individual's knowledge, experience and bloodline.
However, if you were to ask what factor plays the most important role in forming a spirit, it would be knowledge, followed by experience and then bloodline.
Contrary to popular belief, the bloodline contributed the least to the condensation of a spirit. Knowledge and experience were always more important than it.
But that doesn't mean the bloodline was entirely useless. Because it was a kind of lottery.
Being lucky enough to be born into a family with a good bloodline improves the chance of a person inheriting a higher bloodline grade. And thus making it far easier for the person to reach rank 3 and condense their spirit.
So, in a way, the bloodline determines the talent of the person and whether he can become a rank 3 warrior or not. After all, only rank 3 warriors could form their spirit.