Why do Pound coins have writing on the side?

Answer 1

The most common incuse lettering around the edge of a British Pound coin is "DECUS ET TUTAMEN", meaning "An ornament and a safeguard".

It refers to safeguarding the coin from having "precious" metal shaved from the edge.

Answer 2

Back in the old days when higher value coins were most commonly made from precious metals, it was the practice of many people to shave the precious metal off the edge of the coin and accumulate a little stock of silver or gold.

To combat this, many mints commenced minting coins with reeding on the edge to make it more difficult to shave off the metal.

Further to the reeding, many coins were also produced with incuse (sunken) lettering around the edge to make it more difficult again to shave the coins. The incuse lettering also served as an indicator if any metal had been shaved off.

The most common incuse lettering around the British One Pound coin is "DECUS ET TUTAMEN" meaning, "an ornament and a safeguard".

These days it is mostly ornamental since there are no circulating British Coins made from precious metals.