In contrast to the public Ethereum network’s computational-intensive Proof of Work (PoW) algorithm, Kaleido private chains use permission-based algorithms that rely on voting rounds and digital signatures for state agreement and protection. These algorithms include clique Proof of Authority (PoA), Istanbul BFT (Byzantine Fault Tolerant) and Raft. With the exception of Raft, which uses a single static leader node to deliver blocks to the rest of the network, any node in PoA or IBFT that is designated as a “signer” will participate in voting rounds and append a digital signature to a proposed block as proof of validation. These latter two algorithms also employ round changes between blocks, allowing for equitable participation as a mining/proposing node and the democratic removal of unstable or malicious participants.
Submitted transactions still require gas for proper EVM execution, however, the
gasPrice parameter can always be set to 0 when running against any of these algorithms in a private environment. Nodes that mine and subsequently propose blocks receive no ether incentive, as their only job is to package transactions in the pending transactions pool and generate a properly constructed block for validation by the rest of the network.
For a comprehensive breakdown on each of the available algorithms, please refer to the following blog post: Consensus Algorithms: PoA, IBFT or Raft