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The alt attribute is an attribute of the "img" tag and was created as an alternative for non-visual browsers when they come across images. In other words, the text is meant to be used when the image is not visible on the page. Instead, what is displayed (or read) is the alternative text.
But now that people can search for images on search engines, this attribute can contribute to your SEO. So, include a key-word rich, but simple description of the image in your "alt" attribute and your site will show up on image searches, as well. This, in turn, can improve your overall ranking.