Apple recently released OS X 10.10.3, which includes the new Mac Photos app with iCloud Photo Library. (Side note, you should definitely update if you haven't already because it includes a big security fix.) iCloud Photo Library was already available on iPhones and iPad. When opened for the first time, Photos prompts you to use iCloud Photo Library. Here's a quick explainer on how this differs from the past, and whether you should use iCloud Photo Library or Photo Stream.
iCloud Photo Library vs Photo Stream
Both of these services automatically make your photos available across Apple devices, but they differ a bit. Photo Stream only syncs that last 30 days of photos or 1,000 photos, whichever is larger. iCloud Photo Library stores all photos in the cloud, but requires iCloud storage space to do this. Users only get 5GB of iCloud storage by default, which is shared with device backups and other services. 5GB won't be enough storage for users that take a lot of photos or have multiple device backups stored online. Photo Stream doesn't sync videos, and may store images at lower resolution. iMore has a nice post summarizing some of the other differences.
It seems Photo Stream was designed to quickly access recent photos on multiple devices and users were still required to back up photos to a computer manually or an online service like Dropbox. iCloud Photo Library is designed to be a complete online photo and video backup solution built right into iPhones, iPads, and Macs.
Free online backup options are good alternative
iCloud Photo Library sounds like a nice upgrade, but many users will have to pay for additional storage to back up their entire photo library. I have almost 10GB of photos and home videos, for example. 20GB of iCloud storage only costs $1 per month, but why pay when there are other free options with plenty of storage available?
I currently use Flickr to automatically back up my entire photo library from my iPhone (which works well for me because my iPhone is my only camera). There are several great free photo backup options: Flickr offers 1TB (1,000GB), Google offers 15GB shared with Gmail and Drive, Box offers 10GB, and Dropbox offers 2GB.
I like the new Photos app for Mac, and I'll continue using Photo Stream to quickly access my recent photos on other devices. I'll use Flickr to automatically back up any pictures I take with my iPhone, and will also manually back up to my Mac from time to time. iCloud Photo Library is a nice upgrade for people with small libraries or those that are already paying for additional iCloud storage. Perhaps I'll use it one day, but right now the free options are working well for me.