You can also directly attack the economics of bike resale. Make an inexpensive bike with a combined drive shaft, shifting mechanism, and lock mechanism internal to the frame. Put it together in such a way that it's quite possible to disable the lock, but impossible to do that without rendering the bicycle inoperable.

Then, instead of selling these bikes, one leases them. It would be impossible to sell such a bike without the buyer knowing it was stolen. (It may also be impossible to manufacture such a bike in the first place, but I'm not sure one could know without trying.)

Puma (the shoe people) sold a bike for several years with a lock comprising part of the frame. If the lock were cut, it would make the bike frame unstable, theoretically discouraging theft. I don't know if it was successful in any objective way, but it was an interesting idea: http://www.bikeoff.org/design_resource/DR_bikes_examples_pum...

Making the bike frame unstable isn't strong enough. People still ride unstable bikes. A fabrication method that involves squeezing spring loaded parts into a tube could serve to make the bike inoperable when dismantled, even to the point of immobilizing the rear wheel.

I heard about thieves vandalizing apartments where there is nothing precious to steal, so you might just get your bike destroyed in anger. On the other hand, they may as well just take a less secured bike. That would really need to be tested in practice.

You'd probably be sued for damage to clothing and emotional stress.

That's great, until you lose your key

That's a problem with cars right now. The combination of a wallet key, a spare at home and always being able to go back to the dealer make it not-that-big-a-deal, in my experience.

With bikes, at the moment, it seems to be a significant problem: there are a ton of bikes in Copenhagen that end up stuck somewhere because the owner lost the key or forgot the combination. Sometimes the owners get a bolt cutter and cut the lock off; other times the police eventually show up to an area that's getting full of abandoned bikes, cut all the locks (after tagging them for a few weeks, which basically declares open season for anyone else too), and haul out a whole set of bikes. I'm not sure the economics work out for it to be worth doing the equivalent of going back to a car dealer for a new set of keys, when just buying another used bike costs $150-300. A car's worth doing it for because it's expensive, so even a dealer charging you $200 is worth it. But with bikes, even with the current economics many people don't bother: figuring out how to cut a U-Lock is more hassle than buying another cheap bike, and not much cheaper.

Really? Wrap it up with a newspaper and do whatever those bad guys usually do to the U-locks. Just make sure it's your bike.

That argument applies to any effective antitheft device. Shall we take it you're against all effective antitheft devices in general?

If you lose your key to your U-Lock, you cut it off. If you lose the key to your frame... saw your bike in half?

You plan ahead. I made duplicate keys to my condo and my car and gave them to a couple friends who can be relied on.

In a system with electronic lock you could have unique factory key stored at the manufacturer, and recovered for a $30 fee upon inspection of id/receipt/etc.

That's what copies are for. Store one in a secure place.