This is Dallas from the Social Care Team here at Shopify. That is a very good question and I can definitely understand how that could be a bit confusing.
When it comes to images with transparency it is very important that the proper image format is used. Generally speaking, the images that are uploaded to a site are JPEGs. While JPEG images are great for photographs with complex colors, if you are wanting a transparent effect you will need to upload PNG files. PNG images are commonly used for things like logos and icons since they are the only simple file able to support transparency.
This link here will go into a lot more detail on all the supported files and formats that Shopify allows. On top of that, it gives more information about their features, the compression rates, color profiles, and a bunch more helpful tips!
This should help to solve the problem with your uploads, but if it didn't please let me know. You can just reply to this forum post and I will be happy to answer more questions.