By default, configuration information in Drupal 8 is stored in the database.
Configuration File Format (YAML)
All configuration data is stored on-disk using YAML files.
Here is an example of a configuration file:
some_string: 'Woo kittens!'
Configuration can also be nested. Here is an example:
label: 'Thumbnail (100x100)'
Configuration has a schema. This is described in https://drupal.org/node/1905070
Configuration File Location for a Site
By default, when you install Drupal, the installer will create a randomly-named directory inside your public files directory for configuration. The name will start with 'config_', followed by a random hash string. Within this directory, the installer will create an 'active' directory for your current live configuration, and a 'staging' directory for configuration you are importing.
You can change the locations of your staging and active directories by editing your settings.php file.
Default Configuration for an extension
Optional Configuration for an extension