I have been doing some research and I hope I can give you some suggestions. There does seem to be a lot of conflicting advice out there and everybody has their own preferred method. Hopefully that's all part of the fun of growing your own plants and you can experiment a little to find out what works best for you.

A popular medium among growers of hot peppers seems to be fine grade fir bark. You should be able to find this at your local garden center, usually marketed as orchid bark - but make sure it is fine grade as the particle size in regular orchid bark is too big and in addition to the germinated seedlings finding it difficult to emerge, the heavy particles will decrease airflow. In addition, it is common to produce a basic mix using bark and regular potting soil. The bark in the soil lessens compaction, promoting good airflow, while the soil retains moisture. Other elements can then be added to this base as desired e.g. lime or crushed eggshell provides the plants with calcium and can help to neutralize the acidity of the bark; perlite or vermiculite aids drainage in the soil and also promotes good airflow and alfalfa, or composted material, will add important nutrients such as nitrogen and potassium to the soil mix.

Hopefully there are some other users out there growing hot peppers who can share their experiences.......