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When received, the artifact is called Nameless and cannot be equipped. After the player names the artifact it can be equipped. Artifacts can be passed on again by dropping them in online fights, where they can be renamed by the new owner. Players can only have 20 artifacts at a time.
The artifact is a copy of a piece of equipment the other player has. Equipment combinations are not copied as artifacts have their own special combinations. Artifacts gain stronger combinations as they pass from player to player. They start with combinations that weaken the player. After 50 owners, they bestow the best combinations.
As the artifact passes through owners it may gain effects such as "Worth more money in the shop" or "Can be equipped by all Chaos warriors."
Artifacts no longer carry combinations of their own, but instead bestow the player with bonus effects good and bad once the player names them. Such bonus can be EX force absorption, to initial assist charge, and just about anything. Another change is that players can receive artifacts by simply fighting their friend cards. If one exports and then imports one's own friend card, it's possible to fight and receive artifacts without the need of playing online.
Despite Kiros's claim that naming the artifact doesn't affect the artifact's bonus, this is actually technically wrong: once the player names the artifact the effects are already set for the next drop of that artifact. The simple way to put it is renaming the artifact to whatever the player wants may prove difficult; if someone wanted to rename their shield to "Fireshield," s/he may get unwanted results. No matter how many times that person attempts to rename it the same thing, they will always get the same effects. The only way to change the effects for that particular artifact is to rename it and pass it to another player or friend card, so that the effects are again randomized. After that, the player must receive it from battle again.
There is an artifact menu where the player can name Nameless artifacts, view one's named artifacts, sell them or view the artifacts history, such as previous owners and previous names. It shows the stats of the artifact and its base, the item it started off as.