How should the storage of a master key be implemented within Salesforce?

Storing a master key on the contact object as an external ID is a valid approach because it allows the master key to be associated with a specific identity within the Salesforce environment. The contact object is a core part of Salesforce's data model, and utilizing it to store important identifiers can facilitate easy access and management of relationships. By leveraging the external ID field on the contact object, it allows for a unique and efficient way to reference the master key without creating additional data structures that can introduce complexity.

The external ID field can also be indexed, improving query performance when looking up records associated with that key. This method supports Salesforce's robust data management capabilities, leading to improved integration and data governance.

Addressing the other options, creating a custom object to store the master key introduces the need for additional management and maintenance of that object, which may complicate your data architecture without significant advantages. Storing the master key in Heroku Postgres complicates the integration and security requirements, as it requires additional measures to access and secure the key outside of Salesforce. Utilizing an external object as the storage method doesn't align with best practices for key management, as it may lack the appropriate controls and visibility that a core Salesforce object like the contact provides.