How to get rid of these displacement artifacts? Got a big plane, sculpted some hills, put a displacement modifier on the plane, the coordinates are a uv map for just the hills. Now there is these nasty artifacts at the borders of the whole thing. Also notice how high the strength is, usually you have to set it lower than 1.

Is there an easy workaround to get rid of the artifacts or do I need to sculpt it? 

What is the reason for the high strength of the modifier to see results of the displacement?



The sculpted hill. The selection is the uv map which the modifier gets applied to. (one won't see the back of it)



The displacement map. Don't worry about the upper part it's from a hill somewhere else.
If I understand you correct, it is the sudden drop in the terrain and the jagged edge that you want to avoid. You must smoothe the edges of the heightmap. 

The transparent portion of your texture is treated as white. So it goes quite abruptly from dark to white.

One way to do this is in photoshop.


Duplicate the layer.
Smooth the bottom layer. (the smaller blur radius the better result)
Merge the two layers.
Repeat this until the entire image is filled.


It is handy to make this an action (a macro or a script) in photoshop. It can easily be recorded.



Halfway step:


Final result: