I've been taking SSKI and Lugols internally for half a year now. Apart from that, I painted this toenail only once with Lugols, that was about half a year ago. I painted the nail and also the surrounding skin and let it dry before putting on a sock before going to bed. The part of the toenail that I painted has stayed yellowish ever since. The new part is colourless.
So maybe a bit of both: internally and externally.