Explain the Original Energy-Saving Concept

This is an old water heater tank. He had this tank sitting beside his wood stove. It is a galvanized tank. We figured out that if it's sitting beside the wood stove, it would preheat the water that went into the water heater. In other words, it made his water heater work less in the wintertime. So, that was kind of cool. We did figure out that just leaving it silver, it would not absorb the heat as much as