It is meant to solve a major drawback to receiving comment spams, by discouraging spammers from leaving a comment because search engines will ignore the link anyway.
In so doing however, it also discourages readers from commenting because they too are being ignored by search engines! It thus creates a dead link between a blogger and its readers who leave legitimate comments to the site. This ‘flaw’ takes away the camaraderie and sense of community between bloggers and readers as the rel=”nofollow” tag takes away any incentive of commenting to a post.
What official Google Blog says about nofollow?
“From now on, when Google sees the attribute (rel=”nofollow”) on hyperlinks, those links won’t get any credit when we rank websites in our search results.”
Example of Nofollow link:
Link with Nofollow:
When you have rel="nofollow" in your blogger template, the tag automatically gets into the link saying search spiders "Not to follow".
Read Wikipedia on rel="nofollow"
You can encourage people to comment on your blog once they recognize that links in comments are being followed. To discourage spam enable comment moderation in your Settings---->Comments. Also put a prominent text widget in your sidebar proclaiming that links in your comments are followed by the search bots. This will act as a freebait by sharing your link juice with fellow bloggers.
MODIFYING THE TEMPLATE
To do this login to dashboard and click on layouts of your blog. Then click on Edit Html subtab of Template tab. First backup your template by clicking on the Download Full Template link. Put a check in the Expand Widgets Template Checkbox at the top of the Edit Template text box. This expands the Blog Posts Widget Code within which is the comments code.
Using Firefox search ctrl+F5
Delete the words in the code : rel='nofollow' and save the template.