What are no-follow tags?
No Follow is an attribute that is displayed in the code as follows: rel="nofollow" or content="nofollow". With such an attribute in the code, Google does not follow the corresponding page.
What significance do no-follow tags have for SEO?
No follow links are clearly part of a natural link profile. This attribute is particularly helpful if certain target pages are not to be crawled and followed.
If you look at the situation from a link building perspective, it is not good to use nofollow, as the link loses value. There is no positive effect on the ranking of a target page. However, it is not rated negatively either.
Ultimately, it means that a nofollow link does not inherit any link power. For Google, however, it is recognizable that an authority is linking to another website. This is already a positive signal, even if it is a nofollow link.
Wikipedia is a good example. Every external link in Wikipedia is provided with the nofollow attribute, but does not have a negative effect on the other pages.
Can you do without no follow links?
In the Google Webmaster Guidelines, there are examples of cases where links even have to be explicitly provided with no follow. If regulations of this kind are disregarded, it is possible to be penalized by Google with an algorithmic or manual penalty.