The short and confusing answer is both. Let me try to explain.
As of this morning, the authoritative DNS nameservers at Go Daddy were unavailable. These servers provide the IP addresses of local DNS servers containing domains hosted on Go Daddy. So, if you’re hosted on Go Daddy, you’re DNS is in one of these local DNS servers. External queries would not be able to find your IP address because the authoritative servers at Go Daddy could not resolve the local DNS server containing your information. You are essentially down to authoritative DNS lookups and anyone without a cache containing the local DNS server with your IP address.
For most people, this is not an issue. Go Daddy is large enough with enough regular traffic to generate a large cache of DNS entries. If you are hosted on Go Daddy, returning customers will have cached DNS information and be able to navigate to your site without the need to hit the authoritative DNS servers. Even many new customers can navigate to your site based on cached resolutions to the DNS servers with your domain information. However, new customers will be unable to resolve if they or their ISP has not cached DNS for your site.
MxToolbox DNS lookups show Go Daddy DNS and DNS for domains hosted on Go Daddy as down. We do this because the authoritative DNS servers cannot resolve the local DNS servers, so the lookup chain is broken. Our lookups and monitors always start from the root and do not use cached information, so you get a complete look at the DNS configuration.
Further, this issue may eventually cause a situation where your site becomes completely inaccessible. DNS entries have a limited TTL (Time to Live). When TTL expires, the entry is erased from the cache. Should Go Daddy’s outage last longer than your domain’s TTL, customers will be unable to resolve your IP address and unable to connect to your site. MxToolbox recommends DNS Monitoring or Domain Health Monitoring for your mission critical domains so you are warned of these issues before it becomes an outage.