I saw this image on IBM's blog. The author was explaining how blockchain could be used to implement self sovereign identities. But, isn't the last step wrong? In order to decrypt Alice's message, Bob should use his private key instead of Alice's public key, right? Of course, while encryption Alice has to use Bob's public key.

Right, though he should still have Alice's public key to verify any signatures.

Apparently I had heard it some where that you identify you self by signing the message with your private key so that the other guy can verify that is you by using your public key. But the data or message encryption take place with receiver's public key, so that he can only decrypt the message.
Basically the authenticity of identity is by your signing the message and confidentiality is by encryption

@sak96 Oh! All this makes much more sense to me now