Alt attribute is a tag which provides a description of the image you use in your website blog etc. The main propose of this attribute is that when sometimes some browser can't display image so if the image doesn't appear in the browser / screen due to any reasons the text in alt attribute gets displayed in place of the image which will be describing the image. On the other hand, there is another tag/attribute called "Tittle Attribute" which is associated with an image that displays the title text of the image to the visitors. If visitors see the image the text description will appear when the user hovers over the image or if the image, also  

Hence it is also an effective way of communicating not only the users but search engine too which will apparently improves your page rank in search result page as it allows the images of the pages to rank in image search result.

Lets take an example:

In the following HTML snippet:

<a href="http://findnerd.com" title="Online project Management Tool, Hire Web Developers, Tech Blogs"><img src="img/home.jpg" alt="Social Network for Tech Nerds" title="Digital Marketing" width="150" weight="180"></a>

Here, Social Network for Tech Nerds is an alt attribute and Digital Marketing is a Title Attribute

Hence it is clear that When an embedded image is linking, the alt attribute of the image may be treated as anchor text.