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Stainless steel chain, separate lock on engine (that’s what they want) and raise it. Keep the dinghy. No T/T on dinghy decreases risk of break in to main vessel. We even removed our ols state numbers as well.
If someone wants your dink and it isn't on davits or aboard, then they will take it in just a few seconds with a set of bolt cutters, SS chain or not! I've found a better option is rigging wire (1X19), which is much harder to cut quickly (if at all) with bolt cutters. It is bulky and a pain, but it will do the job.
But most of the dinghy theft down here is for the motor, not the dinghy. Quite often the dink is found motorless rather quickly. If the whole thing goes missing, I'd be checking the outbound sailing boats, not the locals, and that's where having some prominent form of ID on the dink will be theft prevention.
However, I'm fairly convinced that a goodly number of the dinghies reported stolen were poorly tied to the boat and not stolen at all, especially among those who close the pub night after night.
I think, as painful as it might be to believe, there is a lot more boater on boater theft than local on boater than most suspect.