老外 is an informal, everyday term for a foreigner in China — literally 'old outsider.' It's not rude, but it's casual and can feel a bit blunt; use it among friends or in neutral contexts, not in formal writing or when you want to be extra polite. The second meaning 'layman' is much rarer and mostly appears in set phrases like 在这方面是老外 ('be a layman in this area').