Upcycling is one of those words that sound familiar but turn out to be quite hard to explain to another person. You know what it is but can only give examples when you have to explain it. Similar to recycling, there are unwanted materials involved.
There is also the aspect of refurbishing or just giving the unwanted object a new lease of life. But that is where the similarity ends and things start to get blurry. To add even more confusion there is also a similar term, downcycling.
Upcycling on the other hand purposes to convert items that are not in use to even higher value or appeal than they were original. It relies heavily on creativity more than practicality. You can also check out This Tiny Life if you want to know more about upcycling.
This is seen where the use of the product in its former life is as apparent as possible but made to be as creative as possible in its new use. An example of this is where an old suitcase is remade into a functional chair. All the bits and pieces of the suitcase are there and easy to identify but it is just not a suitcase anymore.
Downcycling and upcycling are forms of recycling that take opposite approaches. Downcycling takes an object and repurposes it in such a way that it is of lower value than the original product.
For example, plastic toys degrade overtime during the cause of their use. These plastics are usually recycled to plastics of lower value than the one they were initially used for like plastic bags.