This definition of smurfing comes from 1996 and the game Warcraft II when certain well-known players made up new names, pretend to play badly, then beat the other players. They picked the names PapaSmurf and Smurfette.
It was used in alt.games.starcraft, and defined in April 1999 as:
someone who makes a new account then pretends they are a newbie.
An origin was offered in the same group in February 1999:
How prevalent do you think fake newbies are? You know, good players who
lure real newbies in for an easy win. Why do they get their jollies from
doing something so stupid?
I think it's interesting to note, however, that this kind of
thing was started in Warcraft II days by Shlonglor and his buddies,
who seem to be demi-gods for some people. They called it smurfing and
Shlonglor's stated reason for it was because they couldn't find anyone
who wanted to play them. So they started picking on newbies and having
great fun 'smurfing' them, that's the name they gave it. He went on to
say how there quickly developed the habit of smurf-smurfing, great fun
he said. Yeah, and who's the one suffering from all this fun the
experienced are having? The newbie, of course. If it isn't the most
inconsiderate behaviour I've ever seen..
A Warcraft II: Glossary defines:
Smurfing
A slang term coined by Warp! and Shlonglor to mean good or famous players using fake names to hide from people then attempting to beat other players. It is only a "Smurf" if those players win.
The earliest definite use of smurfing I found was in alt.games.warcraft in August 1996:
heheh, when a really good player is depressed or is looking for fun
whipping the living hell out of a newbie, he adopts a fake name and then
joins game and ACTS like a newbie, then he thouroughly destroys everyone
in the game. this bizzare act is called smurfing, when he said "don't
step on any smurfs" he meant don't get so caught up u find a smurf, and
then get the living hell beat out of you :)
There was also a reference in alt.games.warcraft that some experienced players were "probably smurfs" in July 1996.
More description:
it was started by Shlonglor, who is more than a SC player (he works for Blizzard as their webmaster). He was one of the all-time War2 gurus and was extraordinarily famous due to his war2 page ... still one of the best gaming pages ever created (although it's no longer anywhere on the net ... he took it down when he began to work for Blizzard).
Anyhoo, there came a point in Shlonglor's fame where no one but a few select individuals would play him; everyone, hearing his name, would do one of the following things: cower in fear, worship like mad, or repeatedly challenge like a newbie. In the midst of this it was virtually impossible for him to get a game.
SO ... Shlonglor and his roommate at the time, Warp, came up with a stroke of genius: make up a false name that no one would recognize and go beat the * out of newbies.
For whatever reason, the names they chose were "Papa Smurf" and "Smurfette."
From hence came the term "Smurfing."
(Shaf, 1999)
A quote by Shlonglor from 2003:
-(1996) I was the originator of the term "Smurf" or "Smurfing" to signify a famous person playing games under a fake name. Before that point, everyone stuck with whatever nickname they had and never considered changing their name or playing under fake names. It began when me and Warp! played under fake names "Smurfs" and fooled all our friends. I made a page about it and it caught on big time. Pretty soon everyone played under made-up names and you had no idea who you were playing. This practice continues to happen a TON today and you still hear about Smurfing/Smurfs which all dates back to me, my site, and my Smurf page.
And an extract from an August 1996 game report ("The Smurfs vs Spiderman(Zima), Red Barron, and Void(idiot)") by Warp!:
Well, I finally played a game worth writing a story about. It was a five player game on Garden of War with medium resources. The players involved were Shlonglor (playing as PapaSmurf), Myself (playing as Smurfette), RedBaron, Void, and Spiderman (who we later discovered was the same person as Zima/Cpl_Will). Shlonglor and I were teammates as were RedBaron, Void, and Spiderman.
And then by Shlonglor, this may be the earliest description:
First let me explain the Smurf thing. Warp and I enjoy making up names and playing people at war2. We make them think we really suck and then beat them up. But the joke was on me because Zima pulled my own trick on me. He played as Spiderman making me think he sucked. Beaten at my own game! So sad. Well we have lots of fun playing as smurfs. We talk in smurf. We smurf us some ass at war 2. I guess that is totally childish, but it sure is fun.
It was first used as an interjection in the 19th century: “They marched, and I amongst them, to face the enemy – heads up – step firm – thus it was – quick time – march!”
Then, at the beginning of the 20th century, it began to be used adjectivally, as in: “He was always right on the job, and looking ‘heads up’.”
Then, around the late 70s, it became a noun, probably through shortening of phrases like “heads-up alert” into “heads-up”: “It is regarded as being a heads-up on a sale.”
Source and references: the Grammarphobia blog
Best Answer
I don't think tails has anything directly to do with what is on the other side of the coin, but rather it is an expression of opposites: the head is at one end of spinal column, the tail at the other (think 'dog' nose to tail are opposites, rather than head and feet). The expression can't make head nor tail of it expresses this concept of opposites, and may be where heads or tails comes from.
The first recorded use of "tails" to mean the reverse side of a coin occurred in a 1684 comedy, "The Atheist," by playwright Thomas Otway. A character in the play advises someone, "As Boys do with their Farthings ... go to Heads or Tails for 'em."
As far as the coin toss goes, it is far from recent. Cross and pile was played in England for many centuries. The cross was the major design element on one side of many coins, and the pile was the bottom part of the die used to cast the 'cross' side of the coin. Brewer's Dictionary of Phrase and Fable (1898) Samuel Butler used the phrase in the 1600s: “Whacum had neither cross nor pile.” (Butler: Hudibras, part ii. 3.)
Before that, it was done by the Romans, and was called navia aut caput ("ship or head"), as some coins had a ship on one side and the head of the emperor on the other.