The lens of each eye casts an upside-down image onto the retina. Then your brain takes these two upside-down images at slightly different perspectives (one per eye) and creates a single right-side-up image.
Or at least, that is almost right. The actual physiology of things is a bit more complex than that. What actually happens is your brain, with the help of feedback signals sent from the vestibular system in your ear, is processing a pattern of nerve impulses to create a useful image based on what you are looking at.
Although the information is coming in upside-down, one could argue that we don’t actually “see” the image upside-down (as one article put it, “here is no image in the brain to “rotate”—and even if there were, who would be the little person in the brain looking at the rotated image?”)
Given this, one might argue we receive the image upside-down, but by the time we are done processing the image and actually “see” the image, it is right-side-up (the brain has “reinterpreted” and “corrected” the information before an image was ever presented).
Still, in general, the half-fallacy “we see everything upside-down” is mostly correct.
With that all in mind, you probably won’t be surprised to hear that processing visual information takes a lot of our brains’ processing power.
To get a full explainer of how our eyes work, check out the video below.
The Visual System: How Your Eyes Work.
FACT: We also “see” (remember, there is an argument over whether the initial sensory information is really “an image”) the world flat, but the two offset images we see and the light and shadowing allow us to perceive depth. So yeah, in overly simple terms, we see two upside-down flat images that are slightly off from each other, and the brain turns that into something useful. Very cool brain… although perhaps even cooler than it is all a little more complex than that.