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Many applications use configuration data. These configurations may apply to the entire organization or to a subset of users, or may differ for each user. In other words, you can define some global configuration that applies to the entire organization, or some minor configuration that applies to some small departments. Here https://www.avenga.com/magazine/salesforce-custom-metadata/ you will learn more about the global configuration settings. Custom objects are not usually used to store configuration data, but in some situations, for example, if you need to have an encrypted text field, custom objects can also be used for configuration data.