No, you don't have to upload your living pictures to Lytro Web (also known as pictures.lytro.com). If you prefer, your living pictures can simply remain on your computer within the Lytro Desktop software where you can enjoy them yourself.
However, to share living pictures online via Facebook or Twitter, email, Google +, Pinterest, or via your website, then yes, you do need to upload your pictures to Lytro Web.
In order to share Living Pictures in a way that your viewers can view and interact with them, they do need to first be uploaded to pictures.lytro.com in order to allow our servers to generate the embed code necessary to host the Lytro Player on your own web page or blog. We offer several Privacy options including Unlisted Pictures so that you can choose who can and cannot see and share your images.
You can embed your Living Pictures on your own website, web gallery, or blog using the embed code generated for our Lytro Player. Detailed instructions for embedding your living pictures are available here.