Furnaces are buildings used to smelt and cook items. They are very important as they are the only way to acquire iron, a key ingredient for most mid-game to late-game items. It requires 15 lumber, 25 stones, 30 leaves, and 1 coal to make. Once it is crafted it will appear in your inventory, where you can right click it to have the item appear in front of you. You can then move around to where you want it to be placed, and press f on it to permanently place it. Furnaces will eventually de-spawn and require a match every time you light it.