Much of what we know is the result of decades of research, but the biggest breakthrough was the discovery of the Rosetta Stone, which contained the same official proclamation in three different scripts: Ancient Egyptian hieroglyphs, Ancient Egyptian Demotic, and Ancient Greek.
With the knowledge of Demotic and Greek already available to scholars, plus a ton of additional research and work, a basic understanding of Egyptian hieroglyphs was eventually reached, which has since expanded with further research.
**Edit**: Adding some notes from a few commentors below (not linking them because I don’t know if this subreddit disallows that):
* Researchers and scholars were able to use their knowledge of the Coptic language to fill in many of the gaps, because Coptic is the closest extant language to ancient Egyptian.
* Although we do know many of the hieroglyphs, we do not know all of them- it’s not always clear what they meant and some are rare and lack context.
* While we do understand much of the language as written, the pronunciation of ancient Egyptian is still not fully known. Some can be guessed at, but it’s hard to say if we have a good grasp of what it sounded like.
Like others have said, the multilingual inscription of the Rosetta Stone was the key! In particular, since I’m not sure if anyone has mentioned this yet (sorry if you have!), the Egyptians wrote the names of kings in cartouches (little bubbles, representative of eternity). This gave the folks trying to decipher them a clue that what was in the cartouches were likely the same words across each of the inscriptions. This was especially handy since Egyptian hieroglyphs have no other ‘punctuation’, making it hard to line up which parts of each inscription corresponded. Letters which occurred in the names of several of the mentioned rulers (e.g. Ptolemy/Ptolmys and Cleopatra/Kleopatra) were able to be identified, eg. the sign for a simple ‘P’ and ‘T’. These were amongst the first identified signs – a lot more work followed of course, to figure out the remaining several thousand and how the language itself was organized!
It’s worth mentioning that the British and the French weren’t the only ones working on this. Arabic scholars had been working on deciphering hieroglyphs and had made inroads even earlier. But naturally the British and the French like to take the lion’s share of the credit.
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