Warmth drains slowly at day and quickly during the night. Once empty, every tick chips off some of your health, making fires imperative for survival.
It's advised to not stay too close to the center, or else the player will take 40 damage every second from burning, but it also heats you up.
Campfire is used to craft Big Fire (35 wood, 10 stone and campfire).
In all non-experimental gamemodes, players will spawn with 1 campfire.
(note, this is olso called firecamp)