diff --git a/setup/update/update.mjs b/setup/update/update.mjs
index 6b56a7c..4380ee2 100644
--- a/setup/update/update.mjs
+++ b/setup/update/update.mjs
@@ -200,6 +200,64 @@ async function extractZip(zipPath, destDir) {
 // MAIN UPDATE LOGIC
 // =============================================================================
 
+/**
+ * Check if update is available by comparing versions
+ */
+async function checkVersion() {
+  try {
+    // Read local version
+    const localPkgPath = join(process.cwd(), 'package.json')
+    if (!existsSync(localPkgPath)) {
+      console.log('⚠️  Could not find local package.json')
+      return { updateAvailable: false, localVersion: 'unknown', remoteVersion: 'unknown' }
+    }
+    
+    const localPkg = JSON.parse(readFileSync(localPkgPath, 'utf8'))
+    const localVersion = localPkg.version
+    
+    // Fetch remote version from GitHub
+    const repoOwner = 'Obsidian-wtf'
+    const repoName = 'Microsoft-Rewards-Bot'
+    const branch = 'main'
+    const pkgUrl = `https://raw.githubusercontent.com/${repoOwner}/${repoName}/refs/heads/${branch}/package.json`
+    
+    console.log('🔍 Checking for updates...')
+    console.log(`   Local version:  ${localVersion}`)
+    
+    return new Promise((resolve) => {
+      httpsGet(pkgUrl, (res) => {
+        if (res.statusCode !== 200) {
+          console.log(`   ⚠️  Could not check remote version (HTTP ${res.statusCode})`)
+          resolve({ updateAvailable: false, localVersion, remoteVersion: 'unknown' })
+          return
+        }
+        
+        let data = ''
+        res.on('data', chunk => data += chunk)
+        res.on('end', () => {
+          try {
+            const remotePkg = JSON.parse(data)
+            const remoteVersion = remotePkg.version
+            console.log(`   Remote version: ${remoteVersion}`)
+            
+            const updateAvailable = localVersion !== remoteVersion
+            resolve({ updateAvailable, localVersion, remoteVersion })
+          } catch (err) {
+            console.log(`   ⚠️  Could not parse remote package.json: ${err.message}`)
+            resolve({ updateAvailable: false, localVersion, remoteVersion: 'unknown' })
+          }
+        })
+      }).on('error', (err) => {
+        console.log(`   ⚠️  Network error: ${err.message}`)
+        resolve({ updateAvailable: false, localVersion, remoteVersion: 'unknown' })
+      })
+    })
+  } catch (err) {
+    console.log(`⚠️  Version check failed: ${err.message}`)
+    return { updateAvailable: false, localVersion: 'unknown', remoteVersion: 'unknown' }
+  }
+}
+
 /**
  * Perform update using GitHub API (ZIP download)
  */
@@ -208,6 +266,20 @@ async function performUpdate() {
   console.log('🚀 Microsoft Rewards Bot - Automatic Update')
   console.log('='.repeat(70))
   
+  // Step 0: Check if update is needed by comparing versions
+  const versionCheck = await checkVersion()
+  
+  if (!versionCheck.updateAvailable) {
+    console.log('\n✅ Already up to date!')
+    console.log(`   Current version: ${versionCheck.localVersion}`)
+    console.log('='.repeat(70) + '\n')
+    return 0 // Exit without creating update marker
+  }
+  
+  console.log('\n📥 New version available!')
+  console.log(`   ${versionCheck.localVersion} → ${versionCheck.remoteVersion}`)
+  console.log('   Starting update process...\n')
+  
   // Step 1: Read user preferences
   console.log('\n📋 Reading configuration...')
   const configData = readJsonConfig([
@@ -324,7 +396,6 @@ async function performUpdate() {
     'LICENSE'
   ]
   
-  let updatedCount = 0
   for (const item of itemsToUpdate) {
     const srcPath = join(sourceDir, item)
     const destPath = join(process.cwd(), item)
@@ -350,7 +421,6 @@ async function performUpdate() {
         cpSync(srcPath, destPath)
         console.log(`   ✓ ${item}`)
       }
-      updatedCount++
     } catch (err) {
       console.log(`   ⚠️  Failed to update ${item}: ${err.message}`)
     }
@@ -387,24 +457,18 @@ async function performUpdate() {
   rmSync(backupDir, { recursive: true, force: true })
   console.log('   ✓ Temporary files removed')
   
-  // Step 9: Check if anything was actually updated
-  if (updatedCount === 0) {
-    console.log('\n✅ Already up to date!')
-    console.log('='.repeat(70) + '\n')
-    // No update marker - bot won't restart
-    return 0
-  }
-  
-  // Step 10: Create update marker for bot restart detection
+  // Step 9: Create update marker for bot restart detection
+  // Version check already confirmed update is needed, so we always create marker here
   const updateMarkerPath = join(process.cwd(), '.update-happened')
   writeFileSync(updateMarkerPath, JSON.stringify({
     timestamp: new Date().toISOString(),
-    filesUpdated: updatedCount,
+    fromVersion: versionCheck.localVersion,
+    toVersion: versionCheck.remoteVersion,
     method: 'github-api'
   }, null, 2))
   console.log('   ✓ Update marker created')
   
-  // Step 11: Install dependencies & rebuild
+  // Step 10: Install dependencies & rebuild
   const hasNpm = await which('npm')
   if (!hasNpm) {
     console.log('\n⚠️  npm not found, skipping dependencies and build')
diff --git a/src/index.ts b/src/index.ts
index 1e493f8..32e441b 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -946,79 +946,49 @@ async function main(): Promise<void> {
     const bootstrap = async () => {
         try {
             // Check for updates BEFORE initializing and running tasks
-            // Anti-loop protection: Track restart attempts
-            const restartCounterPath = path.join(process.cwd(), '.update-restart-count')
-            let restartCount = 0
-            if (fs.existsSync(restartCounterPath)) {
-                try {
-                    const content = fs.readFileSync(restartCounterPath, 'utf8')
-                    restartCount = parseInt(content, 10) || 0
-                } catch {
-                    restartCount = 0
-                }
-            }
+            const updateMarkerPath = path.join(process.cwd(), '.update-happened')
             
-            // If we've restarted too many times (3+), something is wrong - skip update
-            if (restartCount >= 3) {
-                log('main', 'UPDATE', '⚠️  Too many restart attempts detected - skipping update to prevent loop', 'warn')
-                // Clean up counter file
-                try {
-                    fs.unlinkSync(restartCounterPath)
-                } catch {
-                    // Ignore
-                }
-            } else {
-                try {
-                    const updateResult = await rewardsBot.runAutoUpdate().catch((e) => {
-                        log('main', 'UPDATE', `Auto-update check failed: ${e instanceof Error ? e.message : String(e)}`, 'warn')
-                        return -1
-                    })
+            try {
+                const updateResult = await rewardsBot.runAutoUpdate().catch((e) => {
+                    log('main', 'UPDATE', `Auto-update check failed: ${e instanceof Error ? e.message : String(e)}`, 'warn')
+                    return -1
+                })
+                
+                if (updateResult === 0) {
+                    // Check if update marker exists (created by update.mjs when version changed)
+                    const updateHappened = fs.existsSync(updateMarkerPath)
                     
-                    if (updateResult === 0) {
-                        const updateMarkerPath = path.join(process.cwd(), '.update-happened')
-                        const updateHappened = fs.existsSync(updateMarkerPath)
-                        
-                        if (updateHappened) {
-                            // Remove marker file
-                            try {
-                                fs.unlinkSync(updateMarkerPath)
-                            } catch {
-                                // Ignore cleanup errors
-                            }
-                            
-                            // Increment restart counter
-                            restartCount++
-                            try {
-                                fs.writeFileSync(restartCounterPath, String(restartCount))
-                            } catch {
-                                // Ignore
-                            }
-                            
-                            log('main', 'UPDATE', `✅ Update successful - restarting with new version (attempt ${restartCount}/3)...`, 'log', 'green')
-                            
-                            // Restart the process with the same arguments
-                            const { spawn } = await import('child_process')
-                            const child = spawn(process.execPath, process.argv.slice(1), {
-                                detached: true,
-                                stdio: 'inherit'
-                            })
-                            child.unref()
-                            process.exit(0)
-                        } else {
-                            log('main', 'UPDATE', 'Already up to date, continuing with bot execution')
-                            // Clean restart counter on successful non-update run
-                            try {
-                                if (fs.existsSync(restartCounterPath)) {
-                                    fs.unlinkSync(restartCounterPath)
-                                }
-                            } catch {
-                                // Ignore
-                            }
+                    if (updateHappened) {
+                        // Read marker for logging
+                        try {
+                            const markerContent = fs.readFileSync(updateMarkerPath, 'utf8')
+                            const markerData = JSON.parse(markerContent)
+                            log('main', 'UPDATE', `✅ Updated ${markerData.fromVersion} → ${markerData.toVersion} - restarting...`, 'log', 'green')
+                        } catch {
+                            log('main', 'UPDATE', '✅ Update successful - restarting...', 'log', 'green')
                         }
+                        
+                        // Remove marker file
+                        try {
+                            fs.unlinkSync(updateMarkerPath)
+                        } catch {
+                            // Ignore cleanup errors
+                        }
+                        
+                        // Restart the process with the same arguments
+                        const { spawn } = await import('child_process')
+                        const child = spawn(process.execPath, process.argv.slice(1), {
+                            detached: true,
+                            stdio: 'inherit'
+                        })
+                        child.unref()
+                        process.exit(0)
+                    } else {
+                        log('main', 'UPDATE', 'Already up to date, continuing with bot execution')
                     }
-                } catch (updateError) {
-                    log('main', 'UPDATE', `Update check failed (continuing): ${updateError instanceof Error ? updateError.message : String(updateError)}`, 'warn')
                 }
+            } catch (updateError) {
+                log('main', 'UPDATE', `Update check failed (continuing): ${updateError instanceof Error ? updateError.message : String(updateError)}`, 'warn')
             }
             
             await rewardsBot.initialize()