Arthel "Doc" Watson, the beloved flat-picking guitar genius and one of the last direct links to the pre-recording era of traditional American folk music, has died after a fall and colon surgery. He was 89.

For a man who would become a standard bearer of authenticity and technical wizardry in Americana music, Watson was not even discovered until 1960, approaching middle age and playing old fiddle songs on an electric guitar for a rockabilly party band. Watson rode the folk revival wave of that decade, becoming one of its most recognisable and revered figures – his name commanding the same admiration as the likes of Earl Scruggs, Merle Travis and Bill Monroe.

He would go on to record more than 50 albums, win eight Grammy awards, including a lifetime achievement award, and influence multiple generations of younger musicians. But his astonishing virtuosity – all the more impressive given that he was blind since the age of one – was a genre of music unto itself, as trailblazingly modern as it was faithful to its roots, a style of playing that was mimicked by many and mastered by none.

Bob Dylan once compared the sound of his playing to "water running". "He is an institution, an icon," said George Holt, director of performing arts and film programs at the North Carolina museum of art. "I don't know that the state has produced an artist of greater stature or influence than Doc Watson. He is much beloved here."

Arthel Watson was born in 1923 in Deep Gap, North Carolina, a furl in the western region of the Blue Ridge mountains named by Daniel Boone. The sixth of nine children, Watson was born into a family, and a region, shot through with music: his mother, Annie, sang her children to sleep with pre-war standards like House Carpenter and Omi Wise; his father, "General" Watson, played banjo and led hymns at the Mt Patron Baptist Church.

An early illness that restricted bloodflow to his eyes rendered Watson blind before he had turned a year old. But he was taken by music at an early age, when his father would bring home old 78rpm recordings of Jimmie Rodgers and the Carter Family, modern country music pioneers.

Growing up, young Arthel would receive a new harmonica every Christmas. It was his father who made him his first stringed instrument, a fretless banjo, when Arthel was 11. He would spend the next three years learn the old clawhammer style of frailing. In 1988 he told Fresh Air's Terry Gross that his father told him: "Son I want you to learn how to play this thing real well, it might help you get through the world."

But it was the guitar that would open the world to him, and vice versa. His own accounts vary about how he acquired that first six-string – a $12 Stella from Sears Roebuck – but at 13 he could pick out the chords of When the Roses Bloom in Dixieland for his delighted father.

Within six months Arthel with his older brother Linney would pick up spare change busking on the corners of Raleigh, ultimately earning enough money to buy himself a Martin guitar. By 1941 he was in a band that had a regular gig on a radio show produced out of Lenoir, North Carolina. At one of those live shows the announcer said that Arthel was no kind of name for a performer and dubbed him Doc. It stuck.

Six years later, at 24, he would marry 16-year-old Rosa Lee Carlton, who survives Watson, though she is frail having recently suffered a stroke.

Rosa Lee's father was a local fiddler named Gaither Carlton from whom Doc would learn a number of traditional songs. But during the 1940s and 50s traditional songs didn't pay the bills. Working by day as a piano tuner, Doc teamed up with local pianist and railroad worker Jack Williams and the two played a variety of styles at parties – from country to jazz to pop.

Doc would play electric guitar, mimicking fiddle runs that his father-in-law had taught him, only in a harder, more rockabilly style. He also would occasionally sit in with an older musician named Clarence "Tom" Ashley who played more traditional string band music.

Playing with Ashley, whose own career began in the south Appalachian medicine show circuit around 1911, afforded Watson his big break. In 1960 the folklorist Ralph Rinzler travelled to North Carolina to record Ashley, when he encountered Watson. Rinzler, who would go on to co-found the annual Smithsonian Folklife Festival in Washington DC, initially dismissed Watson as being more into flashy, modern, electric music. After seeing him play the traditional tunes of the region, however, his mind was changed.

"The smell of woodsmoke on the clear mountain air, the crackle of leaves and twigs under foot, the sound of a Sunday evening hymn sing drifting across the valley – all are among the treasures of Doc's childhood and present life," Rinzler wrote in 1964.

"He is a unique sort of populariser; a folk professional with rural roots and urban perspective; a performer too distinctive to be labelled with a catchphrase."

Watson would take Rinzler's advice and stick to acoustic guitar almost exclusively, capitalising on the burgeoning urban interest in traditional or "authentic" folk music with his unparalleled flatpicking and fingerstyle technique. He could make a guitar sound like rivers of whiskey: smoky yet bright, effortlessly smooth and dazzlingly intoxicating.

Special, too, was his voice and unassuming vocal delivery – honest, warm and human, nothing fancy yet evocative of his home state's ancient mountains. Rinzler recorded Watson with Ahsley on the seminal Folkways recording Old Time Music at Clarence Ashley's.

No one else was playing like him. The performance made him an overnight folk star, whisked to play up and down the east coast. Watson recorded his own debut solo album in 1963, the same year he stole the show at the Newport Folk Festival.

In 1966 Flatt and Scruggs invited him to sit in on their album Strictly Instrumental. "He lived in these spaces between genres. People want to pigeonhole him," said Jeff Place, archivist for the Smithsonian Folkways label.

"But he's unique. There are people who are really fabulous players. But Doc was Doc. I don't know that he's replaceable."

Watson had started recording and touring with his son Merle and the two would enjoy an impressive run. They appeared on the Nitty Gritty Dirt Band's 1972 double album Will the Circle Be Unbroken, just as the folk boom had begun the fade. The album is a joyous document of Americana music, a brash young band of pickers playing with – and paying homage to – their elders. Earl Scruggs, Roy Acuff, Mother Maybelle Carter, and one of Doc's own inspirations, Merle Travis, all appeared on the record.

Doc and his son Merle picked up back-to-back Grammys for traditional music in 1973 and 1974, kicking off a run of touring that would end in 1985 with Merle's shocking and tragic death in a tractor accident on the farm.

Watson almost quit after the loss his son, but had a dream around the time of Merle's funeral that spurred him onward. He dreamt he was standing in a dark, airless desert, sinking in quicksand. Merle appeared before him and urged him out of the darkness. It gave him the strength to go on playing, he said.

"If I had stayed off the road I never would have gone back. It was so hard," he told NPR's Terry Gross. "It was really hard to go back out there without him."

On that road Watson encouraged younger generations to pick up the music he loved. Generous with the spotlight, he was described by everyone who knew him to be a gentle genius: a man who, despite his blindness, would chop wood with a cross-cut saw, drive a car through a field and wire his own home for electricity.

"He was a super guy," said mandolinist and frequent collaborator David Grisman. Watson invited Grisman up on stage with him at an early New York show, when Grisman was still in his teens, humbling the younger musician. The two would work together through the rest of Watson's life, notably on their collaboration Doc and Dawg.

"I've been listening to that. His performance of Summertime, which was an after-dinner jam session, is one of the great performances of that tune or really any tune," said Grisman. "It's kind of mind-boggling when I listen to it and think he was just playing a few tunes after dinner. It just succeeds on so many levels."

Doc continued to play – and advance – the music he was raised on until he died. The North Carolina Museum of Art had planned what many assumed would be one of his last concerts for 30 June but that evening is likely now to be a tribute concert, if it happens at all.

"He created a style very much all his own, probably in part because he's blind," said the museum's Holt, who is also a former state folklorist. "I don't know anyone who gets anywhere close to capturing his style."