Does the flame simply heat the tank directly, or does it have some way to transfer the heat efficiently into the tank without wasting it heating up the outside of the tank?
There are various designs, but the commonest is a number of tubes or hollow fins across the flame or flue path, with water flowing through them. Some may just have a multi-level / multi-diameter coil of pipe arranged in the flue. In a self-contained unit, circulation between the heat exchanger and tank would be by gravity - the heated water is less dense, so rises.
