There are several ways you can view
the iCloud Drive:
- as an external drive attached to your computer
- as a remote file server that can be accessed by anyone using your Apple account
- as an extension of your local disk drive that stores data but does not take up any storage space on your computer
It is this third view that I find most useful and least understood.
For example, it is possible to have both your Desktop and your Documents folder on the Cloud Drive (System Preferences > iCloud > iCloud Drive > Options > Desktop & Documents folders). As long as there is space on your local boot drive those files will also be mirrored on the local drive, but when you get short of space on the local drive the least recently used files will be deleted from the local drive and will only be on the iCloud Drive.
Counting all my Photos, Tunes, Videos, documents, etc.
, by using the iCloud Drive the over 2TB of data in my user folder occupies only 103.1GB on my SSD. The only time I notice anything different is when a progress circle icon appears next to iCloud Drive in the Finder window. Equally useful, that same 2+ TB of data, images, Tunes, is accessible to my iPhone and iPad (with the help of the Files app) so my workflow can move effortlessly from MacBook Pro to iPad, to iPhone with equal facility.