Now with Sierra you can browse though history of the folder in iCloud Drive. I just tested how it works. I had a bunch of screen shots on the Desktop, which is in iCloud Dive, and I moved them to Trash. And on the Desktop I entered Time Machine without connecting to my Time Machine disk. As I moved to "yesterday," the iCloud syncing indicator appeared, and after syncing, the screen shots appeared. So what I understand from this is that iCloud Drive has information on what have been where at what point of time, and you can browse through them in Time Machine, without attaching an external hard drive. I assume this works only in a short period of time after deleting the files since it permanently removes files from the cloud after certain days since the user delete them. Is that correct? By the way, before iCloud Drive arrived, OS X had something some people called "mobile time machine" which is basically a backup system of Time Machine which allows you to recover deleted files without an external hard drive, and it was possible because your Mac would store deleted files in the hidden directory in the system. However from what I see here it may be that this is no longer the case because assuming the deleted files are on the "mobile time machine" directly, which is locally stored, the files should appear quickly without downloading anything from iCloud. Did Apple kill mobile time machine? Also, assuming Time Machine now can utilize iCloud to browse and recover old files, is it possible to use Time Machine without having set up a Time Machine disk? Another question is how Time Machine treats files on iCloud because if you have a file in iCloud Drive the file is not necessarily stored locally. It downloads as you try to open it. If the file is not local, does Time Machine still take a copy of it? If it does, it requires downloading every time Tame Machine takes a backup, which sounds daunting. However if it doesn't take a copy of files stored in the cloud, it almost questions the purpose of Time Machine: if iCloud fails, you can't recover your files.