no at all. It's possible to use images from local folder, I'll add an example. You may not need to use Cloudimage token if you don't need responsive features (or you can make it yourself or use any other service). Only responsive features require Cloudimage token. However, it's great to use Cloudimage service as you can forget about resizing and compressing images for all devices or different screen width.
You can check how cloudimage-responsive works here [1] [1] https://medium.com/cloudimage/responsive-images-in-2019-now-...