Copper sulphate crystal is blue. So it is also called "Blue Vitriol". Refining industries use it to refine impurities from metals and as a fungicide in agriculture. It dissolves in water and forms a blue solution.
The iron metal reacts with copper sulphate and displaces copper.
CuSO4(aq) + Fe(s) -------> FeSO4(aq) + Cu(s)
Ferrous sulphate form is colourless. As a result, the solution changes its colour.