NB you have to stare at the central black dot for it to work.
What’s happening here is you are staring at the negative of the chroma component of the image (minus the luminance) long enough to fatigue the cones in your retina.
This will cause the cones to temporarily respond with the inverse of the stimulus once it is removed. When the black and white image is restored, your cones are outputting the inverse of the negative chroma… In other words, positive color that aligns with the image!
Specifically, all your cones are constantly being stimulated when you’re seeing stuff (and in particular, white pixels). If all the green and red ones are fatigued, though, the blue cones dominate in that area, so you will see blue.
The same effect is at play in the waterfall illusion, although in some way that’s even weirder, because the neurons that are getting fatigued there are higher up in the processing system, neurons that single movement in a specific direction.
Why does this this illusion of color vanish when I switch my monitor to B&W?
And why, when I look at the individual frames in unanimated format, are some B&W and others color?
This is not an optical illusion, just a color-shifting animated GIF.
It’s never a good idea to resize images with a patterned dither.
Try watching the GIF up until the timer hits 1 second, then refresh the page. The illusion works—it isn’t a color-shifting GIF. Other way to test: Don’t watch the countdown and come into it 20 seconds in, and it’s B&W.
I think what happened is that the effect faded by the time you changed your monitor settings. It doesn’t last all that long.
If something appears to be in color then it must mean it is.
Try switching your monitor to B&W. If this is an illusion, you will still see the effect.
I literally downloaded this animated GIF and it is simply a sequence of B&W stills followed by color stills. This is NOT an illusion!
Paging @popobawa4u! Call for you at the front desk! 
It is an illusion. It is a sequence of black and white, followed by a sequence of color during the countdown, followed by another sequence of black and white. If you’ve stared at the color frames during the countdown, then the second sequence of black and white will appear in color, which is the illusion (the inverse of the color that was present during the countdown) and so appears as a nicely colored image, even though those frames are black and white.
Here’s another way to look at it (literally). Here are two stills, one black and white, and one color. Stare at the center dot of the color one for a while, then switch and stare at the center dot of the black and white one.
I understand now what this is about. The description of how to look at it wasn’t very helpful as it led me to think a B&W image would be transformed. Not to mention I have weird eyesight so I didn’t see anything I’m not already used to seeing.
What sorcery is this?!
As an aside, this “illusion” was featured in my elementary school science textbooks, only they had you stare at an inverse-colored american flag, then stare at a neutral gray background so what you saw was more clearly an after-image.
No you wouldn’t, because you don’t have the inverted color frames fatiguing your cones. It’s an illusion based on your cones getting used to the inverted colors, and that will influence your color perception once you have a white/gray (luma but no chroma) image. If you flip your monitor into B&W you don’t get the illusory effect because it depends on your color vision.
It is an illusion because if you do it properly you will see the B&W image as normal, non-inverted colors when the countdown is complete, it’s a false perception based on cone fatigue (I don’t have the clinical name for the effect), but it’s definitely an illusion.
“Believe none of what you hear, and only half of what you see.” ― Benjamin Franklin
I love stuff like this.
My mind thinks it is so smart.
I consume optically illusional content just to show my brain who the boss really is…Ha!
Take that stupid mind.
