Actually PNG is a raster-graphics file format. PNG is an Abbreviation for
Portable
Network
Graphics.
JPG, or JPEG, are for lossy compression for digital photography, and can not have transparency. Image compression is used to reduce file size. PNG can have alpha channel (which most people call "Image Transparency". The Gray-and-White checkerboard are used to indicate that the image is transparent. Also, people add a gray-and white checkerboard to make it look like an image with alpha channel. PNG was created as a replacement for the Graphics Interchange Format (GIF). Most people think GIF is an image format for animated images, but not just that. The GIF format was used in older World Wide Web Websites.
A GIF image format can support up to 256 colors from a palette, which can be from the 24-bit color space.
Sorry if that was too long, but those are all true statements though.