A transparent PNG stores a fourth value alongside red, green and blue: alpha, the opacity of each pixel.
The alpha channel
Alpha runs from 0 (fully see-through) to 255 (fully solid). Soft edges like hair use the values in between, which is why a good cutout looks natural rather than cut out with scissors.
The checkerboard is not part of the image
Editors draw a grey checkerboard to represent nothing. It is never exported.
Why you sometimes see a white box
- The file was saved as JPEG, which has no alpha channel
- The app you opened it in flattens transparency onto white
- The image was pasted into software that does not support alpha
Not sure which format to pick? See the format comparison