Along with UGC and sponsored tags, nofollow is an indicator for Google and can be used to influence the way links are evaluated. If, for example, your link is a paid ad, try telling Google. A rel nofollow attribute is one way of doing this. Nofollow links are hyperlinks with a rel%3d “nofollow” tag.
Underneath all search ranking factors, underneath all the technical aspects of SEO, underneath user experience and site speed, are links. You can't squeeze the full value out of your pages using nofollow, you have to get rid of those links, and a page without links isn't good for SEO either. Sure, I could avoid linking to it by typing its URL in plain text and using screenshots, but I'm smart enough to know about link-based SEO. For example, if you wanted to link to a spam site, you could do so safely without giving it SEO value using nofollow.
So, even if you've never heard of a nofollow link before, rest assured that any spammy commenter on your blog is probably not getting any SEO benefit from their efforts.