I'm pretty sure that iCloud stores the full version and downloads a lower quality optimised version to your phone. If you open iPhone settings and browse to: > Apple ID > iCloud > Photos There is an option to 'Optimise iPhone Storage' which is enabled by default. This states: > If your phone is low on space, full resolution photos and videos are automatically replaced with smaller device sized versions. Full-Resoluti…
This deals with the storage on the phone, which you can find in Settings > Manage storage. It has nothing to do with the storage in the cloud.