When iron nails are dipped into blue copper sulphate solution, a chemical reaction occurs. The blue copper sulphate solution contains copper ions (Cu2+) and sulphate ions (SO4^2-), while the iron nails contain iron atoms (Fe).

In this reaction, the iron nails act as reducing agents and the copper ions in the solution act as oxidizing agents. The iron atoms in the nails get oxidized, losing electrons to form Fe2+ ions, while the copper ions in the solution get reduced, gaining electrons to form solid copper (Cu).

As a result, the iron nails slowly dissolve in the solution, and the blue colour of the copper sulphate fades away because the copper ions are being converted into solid copper. Therefore, the correct option is 1 - the iron nails dissolve and the blue colour is discharged.

Option 2 is incorrect because the blue colour of the copper sulphate solution does get discharged as a result of the reaction.

Option 3 is incorrect because the iron nails do actually dissolve in the solution.

Option 4 is incorrect because although the blue colour of the solution is discharged, the iron nails do dissolve.

Therefore, the correct answer is option 1.