One blocks water at the outside face, the other collects it at the footing and pumps it away. The choice is usually decided by what's above the wall, not below it.
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Waterproofing a basement: inside, outside, or neither
"Waterproofing" covers three completely different jobs at three completely different scales, and the word alone tells you nothing about which one you are being sold.
Managing water is not the same as blocking it
The single most useful distinction in this subject is between keeping water out and giving water somewhere to go. They sound alike and they are opposites.
Exterior waterproofing is the first idea: excavate down to the footing, clean the outside of the wall, apply a membrane, and put in drainage so water never touches the structure. It is the most thorough approach and it is the most disruptive — it means digging out the perimeter of the house, and it lives or dies on what is in the way (a deck, a driveway, mature planting, a neighbor's property line).
Interior drain tile takes the opposite view: water is going to reach the wall, so intercept it at the footing inside, run it in a perforated pipe under the slab and let a sump pump lift it out. Nothing is being blocked; it is being routed. This is why a system like this is inseparable from the pump — the drain is only as good as the thing at the end of it, which is why sump pumps get their own section here.
And then there is the third category, the one that fills hardware store aisles: waterproof coatings and masonry paint. These have a real and narrow use — they resist dampness and vapor moving through masonry. What they cannot do is hold back water that is under pressure. If groundwater is pushing on the outside of that wall, a coating on the inside is a film with the whole weight of a saturated yard behind it. It fails, and it usually fails after it has hidden the problem for a season.
There is also an honest answer that nobody selling a system will lead with: sometimes the correct fix isn't waterproofing at all. If the water is arriving because the ground slopes toward the house and the downspouts discharge at the foundation, the cheapest effective work happens outside, in the yard, and it belongs in the drainage section rather than this one.
Waterproofing guides
Perforated pipe in washed stone at the footing. Simple until it silts up — and a clogged drain tile behaves exactly like a basement with no drainage at all.
Sources
What this page explains is based on these official sources. If you check one and it does not match what you read here, send it to us and the article gets corrected.