Bitcoin can not replace fiat because fiat is very powerful and it is government supported so it will be hard for bitcoin to do defeat fiat. It is just good for bitcoin to not replace fiat because it will not succeed and it will just lose some time trying to do that. Skip doing that and focus on other helpful things rather than defeating or replacing fiat.
Correct, fiat is government currency and Bitcoin is independent. Governments will always want to control their currencies which is one of the main reasons why Satoshi Nakamoto created Bitcoin. I think both will exist together for a while.
actually in present time the users of bitcoin are also very few. as a large number of people still do no know any thing about bitcoin. they still need proper knowledge and introduction about bitcoin, but i think it will take decades when all the people of the world will start using bitcoin.
i think the users of bitcoin are continously increasing and we are hopeful that the number of bitcoin users will continue to increase. as we can see that even now the users of bitcoin are present in all over the world, but still the facilities of bitcoin to be use as currency is not available everywhere.