Realtime Terrain Destruction

Hi everyone.
First, you should know I’m working on a game. But I have some trouble with the building/destroy mechanics .
The game generates a random terrain. Fine, but waaaait. It’s not like Minecraft… No blocks! Realistic terrain, with round Hills, mountains and more. So thats different to the typical building/destroy mechanic.
How does it work? It must update the terrain + new collision boxes. If you thing this ist impossible:You’re wrong, man! Watch some “Starforge” Videos, like the Release Trailer.The player is mining a hole. How the hack is this possible?

Thank you for your help.
See you!

What you need is known as “Smooth Voxels”. There are a number of algorithms that can achieve this effect. Basically, you generate a minecraft style terrain, then smooth the edges so that they blend together,