I know this is kind of a dumb question but how do you use the furnace?
There are no dumb questions. Many people asked that before and it is currently not obvious.
You need to have the right amount of items in your inventory (e.g. Copper bar is 2x copper ore and 1x coal) and it will smelt it automatically once you stand in front of it.
With the next big update, this will completely change!