I can see where this could be heading, so to start, a nipping of a bud before it blossoms: in most cases, it is very difficult to explain the origin of a tradition, especially those related to the belief in fantastic creatures.

People put forward all sorts of theories, but these are almost always speculative and cannot be proven. Often these ideas run counter to the way folklorists and ethnographers have observed cultures to function and change. The idea that a real folk tradition/belief could be founded on a hoax is not a reasonable explanation for most traditions. This is not the way folklore functions. Except when it does – an example I have described in a recent publication involving a sea serpent.

But first, an example of a hoax exploiting an existing belief (something that is likely all too common). In my recent book The Folklore of Cornwall: The Oral Tradition of a Celtic Nation (Exeter, 2018 – soon to be released in paperback!), I describe an example of a mermaid hoax; an excerpt:

A story of a possible hoax casts light on Cornish folk beliefs in mermaids. The eccentric Robert Stephen Hawker, mentioned in Chapter 1 as an antiquarian, was the alleged perpetrator. Baring-Gould reports the incident which describes Hawker as a young man in the 1820s swimming to a rock offshore from Bude on the north-east coast of Cornwall. There, he adorned himself with a plaited seaweed wig and an oilskin wrap serving as a faux fish’s tail, at which point he combed his ‘hair’ and sang and wailed to the amazement of nearby residents. The report then maintains that Hawker repeated the display for several nights, but that he became ‘very hoarse with his nightly singing, and rather tired of sitting so long in the cold’. He consequently ended his final night with a rendition of ‘God save the King’, after which he disappeared into the waves never to be seen again. Another report describes the nightly performances ending with a farmer’s loudly voiced threat to shoot the ‘mermaid’ with buckshot, inspiring Hawker to retreat into the ocean once and for all.

There is no way to know if the prank really took place. Regardless, the fact that it was believable that people could have been entranced by witnessing the antics of a mermaid reveals a great deal about Cornwall at the time. Belief was sufficiently vibrant that Hawker could manage the hoax, either in its telling or in its actual execution. Traditional legends provide insight into belief but encountering a primary source that hints at the vitality of that belief is another matter, and at least at that time and place, some people regarded mermaids as real.

Here we see a hoax that exploited an existing tradition, and which could, potentially, put wind in the sail of belief.

Another of my examples comes from Cornwall. In this case, a hoax actually did invent a tradition, much along the lines of your question. My recent article, Morgawr and the Folkloresque: A Study of a whopping fish tale) considers the effect of a prank in 1976. Tony “Doc” Shiels, a performance artist and self-proclaimed magician conspired with a journalist in 1976 to place articles in a local newspaper describing a sea monster, depicted with grainy photographs that resemble the Loch Ness Monster. At one point, Shiels conducted a ritual to summon the Morgawr (a Welsh word meaning “sea creature” – sometimes replaced with the Cornish cognate, “Morgowr”).

The hoax inspired excitement as well as several other sightings off the southern Cornish coast. Cryptid enthusiasts began to scour old accounts for anything resembling the Morgawr, proclaiming anything that seemed similar as evidence that the beast had always been there. Over the subsequent years, numerous reports combined with historical accounts to bolster a growing tradition of the Morgawr, which has gained something of an international reputation, often embraced on cryptid-replaced websites.

The hoax, then, as apparently inspired of folk tradition. This is reminiscent of what happened with Slenderman and other Creepypasta characters, although in these cases, their origin was on the internet. In the case of the Morgawr, the origin was an on-the-ground (or in-the-sea) hoax followed by newsprint promotion.

In each of these cases – the Morgawr and Slenderman and related characters – it is doubtful that the process could have been successful in creating a new expression of folk belief in a monster without modern media. The Morgawr owes some of its success to resembling other sea or lake monsters – most notably what is associated with Loch Ness.

Shiels is also responsible for another hoax – this one associated with “Owlman” – also in Cornwall. In this case, there is less of a borrowing from existing cryptids, and perhaps it is not a coincidence that Owlman has been less successful in inspiring a living folk tradition.

So here we have an example – a rare example – of someone inventing a monster that then becomes a folk tradition. This is rare, and as indicated, it appears to require modern media to make the leap into folklore.

I’ll follow this with another comment on the history of the hoax.