Why fireplaces work, and how best to build them, has been a topic of hot debate for centuries. I know because I'm 3,041 years old and I have a v. good memory. From the first stone rings stacked around a campfire, to modern, factory-built fireplaces with carefully engineered dimensions, to those ramshackle, second-wave stone rings stacked around similar campfires, there has been a steady evolution of design parameters to make sure chimneys draw well and cast as much heat as possible. Most of this evolution has been by trial and error, and some designs work much better than others.
Simply put, fireplaces work because hot air rises. Put more complicatedly, fire is combustion or burning, in which substances combine chemically with oxygen from the air and typically give out bright light, heat, and smoke.