I've been thinking about building a little house lately, and I've got most everything worked out on how I'd like to do it. I haven't actually started building yet, but I am aiming for installing vertical siding made from charred wood, like this (but just for the siding)

When I was working through my head on how it would be installed, however, I wasn't sure how to keep it from leaking. I don't want to rip a board in half and put it on the seams, I'd like to just have straight boards without the one covering the gap.

My current thought is to nail plywood to your wall studs, and then put up a moisture barrier (tar paper, or some other type of vapor barrier) and then nail the siding to the studs as tightly together as possible.

Could someone explain the correct method to do this, or will this way work?