Both, definitely. Like, I count my new knitting project as a mini-scary thing, since it doesn't risk a whole lot (time, money, and ego, but not a huge amount of them) but it's still a challenge to my skills and self-confidence.

For me, dancing is scary in both ways: the risk of embarrassing myself in front of strangers is public, but things like testing/expanding my physical strength and flexibility, wanting to capture/replicate the beauty of something I've always liked to watch, doing something "live" when I'm such a perfectionist ... that's more internal, and it matters less if other people see my success or failure there.