Jacob throws MIB into The Source/The Light, turns MIB into smoke monster

After pummeling the Man In Black at the caves after he killed Mother, Jacob drags MIB through the jungle towards The Source (the tunnel of light/the heart of the island). MIB pleads with Jacob asking him not kill him and explains that she burned his people. Jacob says that he's not going to kill him.

They reach the stream leading to the light and Jacob tosses MIB into the shallow water. MIB looks up at the light and says "She brought you back here?" Jacob says yes because he is now responsible for protecting it. He picks MIB up by the neck and says "You want to find the light? You want to leave this place, brother? Then go."

Jacob then throws MIB into the deeper water and MIB hits his head slams into a rock before floating into the light. Jacob watches as MIB floats into the tunnel and then goes over the edge of the waterfall. Moments later, the ground starts rumbling, the the tunnel gets a little darker and hazy and the tell-tale sounds of the smoke monster can be heard.

The smoke monster comes storming out of the tunnel, knocking Jacob backwards. Jacob stares up in awe as the monster quickly disappears into the jungle.

So this is the origin of the smoke monster. Jacob is the cause of it, and if he hadn't thrown MIB into The Source, a lot of pain and misery for many people could have possibly been avoided. In other words, Jacob's trying to punish MIB for killing mother, ended up making him the powerful creature that he is.