At present some big online marketplaces accept bitcoin but from being an alternative payment to fiat currency I think we are still behind. We also saw many countries are hostile towards bitcoin and china baned everything related to bitcoin. So china's ban on bitcoin shows that it's free from govt control or its the opposite? Bitcoin can really be the alternative to fiat in spite of this extreme volatility?
You are right that Bitcoins were created to be independent currencies and free from government control. As that they are fulfilling their purposes. Governments have no part in our crytpo transactions with bitcoins, the only thing they can do is ban the use in a country. With that companies are not allowed to accept bitcoins anymore and also the mining is shutdown, but the transactions between two individuals is hard to control for the government. A ban on crypto currencies is never to 100%, there are ways to circumvent the ban. And bitcoins can't do anything if countries decide to ban it, it's part of the game. China is not the best example here because their own currency is not traded freely. The governments intervenes if they feel that the value of the Yuan is too low or too high.