Some additions.

1. I view the cloud file as the original/master version. What's on my local computer is a duplicate that is there to make access quicker and available while the internet is down. The background app that supports the cloud makes sure the duplicate and the master are identical. A minor distinction, but it's important when you start adding multiple computers and users into the mix.

2. I am mostly familiar with OneDrive. For that reason, it makes sense to me, and dropbox confuses me. Opposite to dpilot83.

3. Technically, using a cloud file storage service isn't a true backup. If you mess up a file, there isn't an old version sitting somewhere that you can restore. But, the files are stored off site right away with your local duplicate, so that solves the major cause of lost files (hard drive failures). I know that OneDrive keeps files for 30 days if you delete them. OneDrive also monitors mass file changes and warns you. Say you delete entire folders of files, or the names change. This is to help you if a virus has gotten into your system.

4. I use the cloud to solve the issue that I am human and don't get backups done regularly. I still like to have full backups on occasion to a local usb drive that is usually not connected. That allows quicker restores if I have to rebuild or replace my computer.

5. With two factor verification and warnings when a different computer is trying to access your account, I feel quite safe with cloud services run by a major company like Microsoft.