Suppose Wilhelmina spends most of her time in an extremely detailed virtual reality environment. Therein, she uses virtual tomahawks, virtual knitting needles and virtual laser rifles, and chats with various people, some of whom are virtually bald (in the sense of "virtually" in "virtual tomahawk") and some of whom aren't. She does not use the "virtual" and "virtually" qualifiers, however. She talks of fighting a non-bald enemy with a tomahawk, knitting a sweater for a bald friend and engraving a plaque with a laser rifle for the runner up in the Easter egg hunt who neither definitely bald nor definitely non-bald. She speaks all of these things very naturally, the way she would were the virtual reality not merely virtual, though if you ask her, she will tell you that fundamentally all that reality exists through its representation in a network of computers.
There are at least two lessons to be learned from this story.
Lesson one: We should not find implausible the idea that the full range of sophisticated discourse exhibits the kinds of vagueness that it does, but nonetheless there is no vagueness at the fundamental level. Wilhelmina's linguistic and non-linguistic interactions in the virtual world can, in principle, have all of the structural complexity of non-virtual interactions. She calls one denizen of her virtual world "bald" and another "non-bald", and she says that it is not definite either way whether her pet Ganymedan ice-worm has died yet or whether she has climbed two mountains today or one mountain with two peaks. Yet none of that threatens the non-vagueness at the fundamental level of the digital implementations (assuming that's in fact non-vague). I submit that the same is true in the non-virtual world, and in fact that the lack of vagueness at the fundamental level is a powerful way of judging what is not fundamental.
Lesson two: What do we want to say about the ontology of the objects in the virtual world? The following seem to me to be correct. The virtual artifacts are artifacts. While the virtual tomahawk isn't a tomahawk, it is, nonetheless, a tool. An artifact is something that is for use, and Wilhelmina does appropriately use the virtual tomohawk to achieve certain results. A virtual killing of a virtual wolverine is not a killing, but it can nonetheless be the achievement of a goal. Artifacts can be implemented in all sorts of ways. One could have a portion of a magnetic field as a box. The virtual tomahawk is then a tool (just as much as programmers quite properly talk of various computer programs like compilers and linkers as "tools"). The virtual tomahawk is a tool, and at least if it was designed by someone (say, Wilhelmina, out of virtual iron and a virtual stick), it is an artifact. But we do not, I think, want to say that the virtual tomahawk really exists. Therefore some artifacts do not really exist. But I do not think one can really make a further ontological distinction within artifacts, between those that really exist (maybe like tomahawks) and those that don't (maybe like virtual tomahawks and boxes made of portions of magnetic fields). So, it is plausible that no artifacts really exist.
Observe also a contrast with living things. While the virtual tomahawk is not a tomahawk, but is nonetheless a tool, the virtual wolverine is not only not a wolverine, but is not alive at all. Why? After all, maybe the simulation is very detailed and includes all of the relevant internal processes. I say that the reason we don't want to say that it's alive is that things that are alive really do exist, while the virtual wolverine does not.