This passage has engendered quite a bit of controversy among Book of Mormon scholars who are trying to determine the language Nephi used to record his history. The traditional teaching is that the Book of Mormon was written in "reformed Egyptian," a script which used symbols capable of conveying entire concepts in much less space than Hebrew. The term, "reformed Egyptian," comes from Moroni's description in Mormon 9:32. There is speculation, however, that the language of Moroni's day was considerably different than that of Nephi's day. Moroni admits in that verse that it had been handed down and altered by us, according to our manner of speech. Any linguist knows that languages can transform quickly, especially over hundreds or thousands of years. Nephi doesn't name the language he used; he says it was the language of my father. Lehi was a Jew of the tribe of Manasseh. Hebrew would have been his primary language. However, scholars have noted Lehi's wealth and the obvious influence of Egyptian culture on Book of Mormon writings and practices. These suggest that Lehi was a prosperous merchant who would have had much trade with Egyptian merchants. He undoubtedly knew their business language. Nephi suggests that this language was part of the learning of my father and the learning of the Jews. This would have included learning how to speak and write the Egyptian language of Lehi's day. No scholar is as qualified to teach on this subject as is Hugh Nibley, who said:
"'We now realize that the ancient Jews could write quickly and boldly (in Hebrew), in an artistic flowing hand, with the loving penmanship of those who enjoy writing.' And the Nephites got rid of this to learn in its place the most awkward, difficult, and impractical system of writing ever devised by man! Why all the trouble? Simply to save space. What space? Space on valuable plates. When did the custom begin? With Lehi. Where and when did he learn 'the language of the Egyptians'? In Palestine, of course, before he ever thought of himself as a record-keeper. Did the wealthy Lehi learn Egyptian characters so that he could sit in his house in the land of Jerusalem and by writing Hebrew with demotic (a form of Egyptian writing which differed from classical Egyptian hieroglyphics; it was used for recording deeds, books, etc.) symbols save a few cents a month on writing materials? And did he command his sons to learn Egyptian so they could save space when they kept records? Of course not: when they learned the language, neither Lehi nor his sons had any idea that some day it would be useful to keepers of records on metal plates. They had no other reason for learning Egyptian characters than to read and write Egyptian. It was only later when historians became cramped for space that they saw the advantage of continuing to write in Egyptian. And the Egyptian characters can only have been preserved for their use because the language was also preserved…"
"The fact remains that the abridging and editing of the Book of Mormon was in a language known to no other people on earth but the Nephites." (Hugh Nibley, Lehi in the Desert and The World of the Jaredites, pp. 16-17)
In conclusion, what was the language used by the writers of the Book of Mormon? The short answer, "reformed Egyptian," is probably more helpful and accurate than the long answer discussed above.