In the RGB color space each pixel has a red, a green, a blue. These are called channels.

In other color spaces there are other channels. In CMYK there are cyan, magenta, yellow and black channels. Indeed you can even have your own custom defined channels containing your own colors: spot colors. However RGB is the most common color space.

As well as the standard color channels, images also contain an Alpha Channel which is used to specify the level of opacity of the image. Sometimes you will hear alpha channels referred to as masks or mattes. Typically a mask or a matte is a reduced quality alpha channel containing only binary - 0 or 255 - opacity values.

Normally images are completely opaque so if you want to blend your image with another, you may wish to insert a new Alpha Channel.

Generally you start with two images. One contains the picture and the other contains the Alpha Channel. You insert the Alpha Channel into the picture.

Then you draw the image-with-alpha onto another background.