This has been revised, see File > Database Properties, as this was only sufficient to lock out your family or colleagues not familiar with DEVONthink. In case of sensitive material encrypted database (see File > New Encrypted Database…) are now recommended.
I am confused about this feature. When I try synching an “encrypted database” to another machine, the database appears to be unencrypted. That is, on the new machine, it appears to be a normal database (.dtBase2 instead of .dtSparse). Is this correct?
If so, should I just avoid synching an encrypted database if I want to keep it private?
Thanks for the report! I have confirmed that importing an encrypted database is yielding a .dtBase2 file. Development will have to investigate this.
Also, remember DEVONthink 3 is in beta testing, meant for testing, finding and reporting bugs. It should not be used in mission-critical or production environments.
Database encryption is a local option as sync stores use their own (optional) encryption. A database can be imported into an encrypted sparse image using e.g. the contextual menu.