It isn't until episode three that we're introduced to the Black Hat Man in a terrifying exchange between him and Lucky on a late-night bus. He's the one poisoning the minds of the Black families that move into East Compton, causing Ella Mae to maim her husband and murder her children, and Arnette Beaumont to murder her family before ending up in an institution. The reason the Black Hat Man is so concerned with getting Black families out of East Compton stems from a deal he made with the devil while he was alive.
During episode eight, we learn that the Black Hat Man's real name is Hiram Epps and that he was once a godly man in 1800s Eidolon. After losing his family, he believes God has sent him an orphan to raise named Miles. In actuality, Miles is the devil and works to isolate Hiram from the rest of the community. A Black couple eventually is at the mercy of the community due to a broken wagon and while Hiram initially treats them as his guests and with respect, Miles leads him to believe that the Bible is instructing him to treat them as monsters.
Hiram then forces the couple into slavery before blinding them and setting them on fire, killing them and the rest of his community. Still believing that it is God talking to him, he agrees to a covenant where he will be immortal and have his sight restored so long as he "breaks" any person of color that tries to move into East Compton. If he fails, his soul becomes forfeit. Despite offering Lucky a reborn Chester, she rebuffs Hiram's offer so that he can no longer hurt her family. He is then sent to hell.
