Copy the file .cohost.json.example to .cohost.json and fill in your own information. Right now you have to store your password in plaintext, sorry. Invoke the tool with chimg FILE where FILE is the path to the image you would like to upload. Make sure .cohost.json is in your current working directory. The output will be a URL which can be used to embed your image in another post.

Once the image is embedded in a published or saved post, it is safe to delete the original draft created by chimg. But there's no harm in keeping it around beyond cluttering your drafts.