One of the most important parts in Search Engine Optimization (SEO) are backlinks. Think of backlinks as a recommendation. If other websites reference your site as a good source of further information, Google sees this as an indication that your site is high quality and hold valuable information on that topic. On a technical level, there are 2 main types of links; Do Follow and No Follow.
Do Follow Links
This kind of link effectively tells the search engines that what you are linking to is in fact a great source of further information and should be credited as such. It tells the Search Engine Spiders to follow these links and even pass on the page rank influence to the other site. In this way, your page rank will give an SEO boost to the site you are linking to. So conversely, the more quality sites that link to your site with Do Follow links, on the topic of your keyword, the more valuable Google will see your site. Do Follow links are typically reference links inside the text content of a webpage or blog post.
No Follow Links
Unlike Do Follow links, No Follow links effectively tell search engine spiders that the link doesn’t count. The search engine spiders will still follow and index the link, but will discount its value and not pass Page Rank along the link. This is for links that are not a reference of further information. It is still worth getting No Follow links to your site, as they still help with your SEO, and people still use them to come to your site, but they are not as powerful for SEO as Do Follow links. Examples of No Follow links are typically blog comments, forum signatures, directory links, social media profiles and places where there might be a link to a site without it being a reference or endorsement.
In conclusion, you really need a mixture of both for a natural looking link profile. Both are still very valuable for bringing people to your site. However, if you are serious about SEO and building the value, or Page Rank, of your site, you need to focus on getting quality, Do Follow links.