The process is the not so ancient art of Hobo Nickel Carving. There are a few dozen modern coin carvers amongst us. I could ramble on but I will spare u and give the in a nutshell explanation of these.
The coins are carved ( metal removed and or manipulated) by use of various hand chisels, power assisted chisels, various dental tools, burrs, ceramic abrasive sticks, abrasive points and chasing tools. The metal that the coin is set into is a low melting temp material called CeroSafe. I use a binocular stereo zoom microscope as my eyes and an ipod for my sanity.