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the cylinder (known as Bottom Dead Centre or BDC) the exhaust valve starts to open. As the piston now moves up the cylinder, the hot gases (consisting mostly of nitrogen, carbon dioxide, water vapour and unused oxygen) are expelled from the cylinder. As the Piston approaches TDC again the inlet valve starts to open and the cycle repeats itself.
What you are seeing is not smoke but steam condensing as it exits the exhaust and hits cold air (just like when a kettle boils). The steam is the result of water entering the cylinder(s) due to a head gasket failure. The water boils in the cylinder and is expelled with the exhaust gases.