Favicon is an image shown in the address bar of every browser. It is also known as a shortcut icon, url icon or a website icon. Using company logo or brand icon, most websites have this for a website recall. Bloggers can also add this to their blogger site.
Here's an easy way How to Add Favicon on Blogger.
Step 1: Login to your Blogger's Dashboard. Go to Layout.
Step 2: Click the "Edit" in the Favicon section of the Page Element. It shows the default blogger favicon.
Step 3. Click "Browse" in the popup window and search for your favicon. Remember to use a square image that is less than 100kb.
Step 4. Save.
Easy as that.
For a typical website favicon, the format should be .ico. and you can get this easily from any favicon generator site. Blogger's setting is supporting .ico but accepting other formats as well like .jpeg and .png. I use .png and it works just fine and a better clearer image when compressed.
If you still happen to see the default icon instead of your uploaded favicon. Try to clear the browser cache and reload the page. In a couple of minute your favicon will show already.